In May, the volume of yuan trading on the Moscow Exchange increased by 17%

In May, the volume of trading with major currencies on the Moscow Exchange amounted to more than 6.1 trillion rubles. The activity of investors in the yuan grew the most, the trading volume increased by 17%, to 2.49 trillion rubles, and the share exceeded 40% for the first time. Demand for other currencies of friendly countries is also growing, but more slowly due to lower liquidity and infrastructure development.

The total volume of trading in Chinese currency with delivery “tomorrow” and “today” on the Moscow Exchange amounted to 2.49 trillion rubles in May. This is 17% more than in April. As a result, the share of the yuan in the total volume of trading in major currencies (US dollar, euro, yuan, Turkish lira, Hong Kong dollar, Kazakh tenge, Belarusian ruble), which amounted to 6.1 trillion rubles in the last month, increased by 4.52%. point (p.p.) and for the first time fixed above the level of 40%.

The total trading volume of the yuan is still inferior to the volume of trading in the US dollar, which in May amounted to 2.55 trillion rubles, which is 2.4% higher than in April. The American currency occupied a little more than 41.5% on the market. At the end of last year, it accounted for more than 47%. It is losing its share of the euro faster, over the month the volume of trading in it decreased by almost 15%, to 1 trillion rubles, or 16.7% of the volume of trading in currencies. Since the beginning of the year, the share of the European currency has decreased by more than 5 p.p.

A strong drop in trading volumes with the euro is associated with a decrease in demand for it from the participants of foreign economic activity. Now the volume of this interaction with the EU countries, both in terms of trade and tourism, has significantly decreased, says Denis Popov, chief analyst at the PSB.

The place of the key trading partner was taken by China, the trade turnover with which in the first quarter grew by almost 39% year-on-year and amounted to almost $54 billion.

“A significant share of trade flows in euros has turned into trade flows in yuan and rubles,” said Andrey Kochetkov, a leading analyst at Otkritie Investments.

Interaction with the rest of the friendly world is also growing, but, as before, the US dollar, which is the main reserve currency of the world, is mainly used in mutual settlements. “The United States has the most developed financial system and provides a reliable, deep and liquid form of savings for foreigners,” said Mikhail Vasiliev, chief analyst at Sovcombank.

Almost all countries, with the exception of the European Union, prefer to trade and save in dollars, including Russia’s main trading partners – China, India, Turkey, the countries of the Persian Gulf, Asia, Latin America, Africa, he continues.

And companies from Russia themselves are not ready to completely switch to trading in any friendly currency, since not all of them have a developed financial infrastructure, a sufficient amount of liquidity, like the yuan. In addition, they all have internal features.

The head of the analytical department of Zenit Bank Vladimir Evstifeev draws attention to the fact that the Turkish lira also has a downward trend against the backdrop of a discrepancy between the classical monetary theory of inflation and base interest rates.

In the past five years, the lira has lost 25-80% against the US dollar every year. The Indian rupee has limited convertibility. “In the event of imbalances in trade, one can be left with a low-liquidity currency, which by its qualities does not meet the Russian interests of foreign trade,” Andrey Kochetkov notes.

According to Mikhail Vasilyev, the use of friendly currencies (with the exception of the yuan) in trade is hindered by an undeveloped system of currency hedging. On the Moscow Exchange, both swap operations (transferring a currency position to the next day) and futures are available to investors, and there is a sufficient amount of liquidity for these instruments, he notes.

Analysts do not rule out a further decrease in the role of not only the euro, but also the dollar. Denis Popov does not rule out a decline in the share of the US currency to 25-30% by the end of the year. “As non-residents from hostile economies complete withdrawal from Russian projects, the volume of dollar trading may begin to decline, repeating the fate of the single currency on the domestic market,” notes Vladimir Evstifeev. At the same time, he clarifies, the main growth, as before, will occur at the expense of the yuan.

Vitaly Gaidaev