The yuan is pushing the dollar – Newspaper Kommersant No. 38 (7483) of 03/06/2023

According to the results of February, for the first time in Russia, the most popular exchange currency traded with delivery “tomorrow” became the yuan. The volume of trades with it exceeded 1.48 trillion rubles, outpacing the indicators for the dollar (1.42 trillion rubles). The share of the Chinese currency in the total turnover of the spot market approached 40%. This is facilitated by the growth of trade with China and the transition to rubles and yuan, as well as an increase in the supply of Chinese currency from the Ministry of Finance as part of the budget rule.

According to Kommersant’s estimate, based on data from the Moscow Exchange, in February, for the first time, the most traded currency in Russia (with a “tomorrow” calculation) was the yuan, which displaced the US dollar from the first line of the undisputed leader. Over the month, the volume of Chinese currency trading exceeded 1.48 trillion rubles, which is one third higher than in January. The volume of transactions with the dollar also increased in February, but only by 8%, to 1.42 trillion rubles. As a result, the yuan accounted for almost 40% of the total volume of trading in major currencies, the dollar – just over 38%, the euro – 21.2% (0.79 trillion rubles). In February 2022, the proportions were in favor of the American currency: the dollar – 87.6%, the euro – 11.9%, the yuan – 0.32%.

Such indicators increasingly indicate the withdrawal of the Russian Federation from transactions in “unfriendly” currencies against the backdrop of expanding EU and US sanctions. In particular, according to the Main Customs Administration of China, the trade turnover between the PRC and the Russian Federation over the past year increased by 29.3%, exceeding $190 billion. According to Mikhail Vasiliev, chief analyst at Sovcombank, about half of the trade turnover with China is in rubles and yuan:

“Some large Russian companies have already completely switched to trading in yuan with China, some still maintain the parity of the Chinese currency with the dollar. We expect that the share of national currencies used in trade with China will increase in the coming months.”

In addition, since the beginning of 2023, the growth in the volume of exchange trading with the yuan is facilitated by the return of the budget rule, under which the Central Bank, in the interests of the Ministry of Finance, began selling Chinese currency on the open market in January. If in the first month of the rule, the Bank of Russia sold yuan from the National Wealth Fund (NWF) for only 54.5 billion rubles. (less than 5.5 billion CNY), then in February it increased sales to 160.2 billion rubles. (about 16 billion CNY).

“The continuing risks of Western sanctions on the Moscow Exchange and the NCC, as well as the de-dollarization policy pursued by the Bank of Russia, also contribute to the decline in demand for the currency of unfriendly countries,” Mikhail Vasilyev clarifies.

In the mode of deals with “today” execution, the dollar still dominates with an indicator of 0.74 trillion rubles. In second place with an indicator of 0.5 trillion rubles. remains the euro. Yuan with an indicator of 0.22 trillion rubles. took third place.

At the same time, for the Chinese currency, the February result was the best ever (the previous maximum was set in December last year – 0.19 trillion rubles). In addition, the result of the past month is more than twice as high as in January (against the background of long holidays in China due to the celebration of the Lunar New Year). According to Oleg Syrovatkin, Leading Analyst of the Global Research Department at Otkritie Investments, Oleg Syrovatkin, the trading mode with “today” delivery is mainly used to sell or buy foreign currency as part of export-import operations, while the trading mode with “tomorrow” delivery is more often used, among other things. for speculation. Therefore, an increase in trading volume in the “today” execution mode indicates an increase in demand for real yuan, for example, from importers, Mr. Syrovatkin believes.

Due to the fact that in March the Central Bank will reduce the volume of sold currency within the framework of the budget rule, market participants do not exclude that this month the yuan may give way to the first place in terms of trading volumes to the dollar. But, according to Egor Zhilnikov, chief analyst at PSB, over time, the yuan will become a more liquid currency against the backdrop of both the continued de-dollarization of the Russian economy and the shift in household demand to the range of Asian currencies. Moreover, the growth of volumes will go both in the mode of execution “tomorrow” and “today”.

Vitaly Gaidaev