The Moscow Exchange, Russia’s largest stock exchange, saw a surge in the trading volume of the Chinese yuan in 2023, surpassing that of the U.S. dollar for the first time, according to Reuters, citing a report by the Kommersant daily on Tuesday.
Data from the report reveals that the yuan’s trading volume on the Moscow Exchange skyrocketed to 34.15 trillion rubles ($391.5 billion) in 2023, claiming an impressive 42% share of the entire foreign currency traded on the platform. This remarkable surge signifies a significant leap from 2022, when the yuan held a modest 13% share.
Conversely, the U.S. dollar experienced a notable decline, with its share dwindling to 39.5% in 2023, accompanied by a trading volume of 32.49 trillion roubles. This decline is stark when compared to 2022, where the dollar commanded over 63% of the market with a volume of 49.90 trillion roubles.
Chinese Yuan Benefiting From Russia’s De-dollarization Moves
The shift from the dollar to the yuan mirrors Russia’s strategic move towards de-dollarization, a response to the sanctions imposed by the U.S. and the European Union due to Russia’s involvement in the Ukraine crisis.
Strengthening ties with China, labeled as its “no limits” partner, Russia has increased energy exports and diversified imports, filling gaps left by the departure of many European and U.S. brands from the Russian market.
China reciprocates by utilizing the yuan for transactions involving Russian commodities, resulting in a record-breaking two-way trade of $240 billion in 2023, a substantial 26.3% increase from the previous year, according to Chinese customs data.
While Russia diversifies trade with other nations like the United Arab Emirates and India using their currencies in over-the-counter transactions, the Moscow Exchange has yet to launch exchange trading in these currencies.
The surge of the yuan on the Moscow Exchange underscores a shift in the global currency market dynamics. Russia and China’s challenge to the dollar and euro dominance signals a new era where geopolitics and economics are undeniably interwoven in the evolving world order.
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