The Chinese yuan has surpassed the U.S. dollar in trading volume on the Moscow Exchange (MOEX) for the first time in March, reaching a record high, according to a monthly financial market overview published by the Bank of Russia (CBR), RT reports.
The yuan made up 39% of the total volume of trading in major currencies, up from 37% in February, while the dollar’s share dropped to 34%, from 36% in the prior month.
This is a significant change from just a year ago when the dollar’s share was 87.6%, and the yuan’s was just 0.32%.
The report suggests that the shift in trading volumes is due to Russia moving away from transacting in the currencies of so-called “unfriendly” countries against the backdrop of sanctions.
The U.S. and the EU have imposed sanctions on Russia due to Russia’s military operations in Ukraine, which have jeopardized the use of these currencies in Russia’s transactions with foreign partners.
“Market participants continued to reduce the volume of transactions in ‘toxic’ currencies in exchange trading,” CBR concluded.
Due to the sanctions imposed against Russia, the dollar and the euro were considered “toxic.”
The growth in yuan trading volumes on the MOEX comes after the trading volume in the ruble-yuan pair exceeded the dollar-ruble pair by the end of February, RT notes.
The trading volume in yuan increased in March to 2 trillion rubles ($24.3 billion), surpassing the 1.7 trillion rubles ($20.7 billion) worth of transactions in the dollar.
There was also a significant rise in the volume of yuan purchases by Russian citizens in March, increasing from 11.6 billion rubles in February to 41.9 billion rubles in March, indicating growing confidence in the Chinese currency.
In February, Finance Minister Anton Siluanov expressed that Russia no longer trusts the US currency and called it a “completely unreliable instrument.”
Similarly, in late March, Russian President Vladimir Putin commented that the country would have liked to continue using the dollar, but the imposed sanctions left Russia with no choice but to move towards de-dollarization.
“We would use the dollar, but they won’t allow us to do that, so how do we make payments? In a currency that is acceptable to our trading partners. The yuan is one such currency, especially since it is also used by the International Monetary Fund,” Putin said.
