One year after signing an “unlimited” partnership with Russia, Chinese President XI Jinping decided to travel to Moscow on March 20 for his first foreign visit since his re-election. A way of reaffirming the “special” relationship that exists between the two countries in a context of tensions with the West since the Russian invasion of Ukraine.
Symbol of this rapprochement between Beijing and Moscow: the rise of the yuan in trading on the Moscow Stock Exchange. In fact, the Chinese currency surpassed the dollar in trading volume for the first time in February, and the gap widened in March, according to Bloomberg data.
Rise of the yuan in Russian foreign trade
The new dominance of the yuan against the dollar on the Moscow Stock Exchange, where the Chinese currency’s trading volume was still negligible a few months ago, illustrates Russia’s desire to reduce its dependence on the United States since the start of the war. in Ukraine. . Because by ignoring the dollar, and even the euro, Russia is simultaneously limiting its exposure to the Western sanctions that have been targeting it since last year.
In this sense, the Russian Central Bank has repeatedly called on companies and citizens to favor the currencies of “friendly countries” against the dollar or the euro to avoid seeing their assets blocked or frozen. Last September, Russian gas giant Gazprom, for its part, announced an agreement for China to liquidate its yuan contracts to circumvent dollar transactions.
It should also be noted that after prohibiting all changes in the foreign exchange market in February 2022, Russia, which mainly used dollars and euros to balance its budget, resumed buying and selling foreign currency in the national foreign exchange market at the beginning of the year. . , in yuan to start. One more sign of the growing importance of the Chinese currency for the Russian economy.
China and Russia have clearly strengthened their trade ties in recent months. In 2022, bilateral trade between the two countries reached 190 billion dollars, a record. The participation of the yuan in the currencies used for Russian foreign trade has skyrocketed, going from 0.5% to 16% in one year, and in the process leading to the spectacular reduction of the euro and the dollar in exports Russian (48% now) .
De-dollarization started in 2014
Although they have multiplied since the start of the war in Ukraine, Russian attempts to de-dollarize are not new. In anticipation of Western sanctions, Vladimir Putin had shown a desire to reduce the weight of the dollar in the Russian economy after 2014 and the annexation of Crimea.
For Timothy Ash, a BlueBay analyst, “Russia has no choice” but to turn to China, he told AFP a few days ago. “The stability of the Russian economy now depends on China, which gives Beijing a new instrument to directly influence Russia,” said Temour Oumarov, a specialist in Sino-Russian relations at the Carnegie Endowment for International Peace.
An analysis refuted by the Kremlin that assures in the voice of Vladimir Putin’s diplomatic adviser that “in these relations there is no leader, nor follower” but “two partners who trust each other and largely share the same objectives.”
Source: BFM TV
