The Yuan is weakened by tariffs from the USA and Russia is buying
Russia believes the Yuan is a good investment. Do you?
Moscow, Russia - Russia’s stock market opened strong on Friday, with both major indexes showing gains. The MOEX Index rose by 0.5% to 2,879.64 points, while the RTS Index increased by the same margin to 1,106.01 points. At the same time, the Chinese yuan dropped below 11 rubles during early trading—its lowest level since June 19, 2024.
This drop in the yuan comes as Russia continues to deepen its financial ties with China. Over the past few years, Russia has been steadily increasing its use of the yuan, both in its foreign currency reserves and in international trade, as part of a broader push to move away from Western currencies like the U.S. dollar and the euro.
Building Reserves with the Yuan
Russia's Finance Ministry has announced plans to remove the euro from its National Wealth Fund (NWF), leaving only gold, yuan, and rubles. Under this plan, up to 60% of the fund will be held in Chinese yuan and up to 40% in gold. The Bank of Russia has also added the yuan to its official reserve currency basket, marking a strategic shift in how it manages foreign exchange reserves.
Yuan Gains Ground in Trade
Russia’s use of the yuan is also expanding in trade. By the end of 2023, more than 90% of trade with China was settled in either rubles or yuan. In the energy sector, roughly 40% of Russian oil and gas exports are now paid for in rubles, and another 40% in yuan—greatly reducing the role of the dollar and euro in these transactions.
This shift is part of a broader trend among BRICS countries to favor national currencies over the U.S. dollar in international trade, aiming to reduce their reliance on Western financial systems.
Sanctions Push Russia Toward Alternatives
The move toward the yuan accelerated after the U.S. Treasury imposed sanctions on the Moscow Exchange and its National Clearing Center in June 2024. In response, the exchange suspended trading in dollars and euros. Since then, Russian regulators have relied on bank reports and over-the-counter trading data to set official exchange rates for those currencies.
Conclusion
Russia's growing reliance on the Chinese yuan—both in reserves and in trade—reflects a significant shift in its economic strategy. By moving away from Western currencies, Russia aims to protect itself from future sanctions and strengthen financial ties with China, especially as BRICS nations push for a more multipolar financial system.
