The share of the Chinese yuan on the Moscow Stock Exchange has reached its highest level ever, surpassing the US dollar as the main currency traded on that market, according to a report published by the Central Bank of Russia. In March, the yuan accounted for 39% of total trading volume on the exchange, up 2% from February. Meanwhile, the dollar’s share decreased from 36% to 34%.
The report notes that market participants have been reducing the volume of transactions in “toxic currencies” due to Western sanctions against Russia that make it difficult to use the dollar or euro for transactions between Russian economic subjects and their foreign partners.
Russian President Vladimir Putin has indicated that Moscow prefers to use the dollar, but that sanctions have led it to move towards de-dollarization. Putin has also noted that the United States is “shooting itself in the foot” by using the dollar as a weapon to serve “momentary political considerations.” Moscow seeks to increase the use of the yuan to trade with other nations while increasing transactions in currencies that are “reliable.”
Relations between Russia and the West have been strained due to the annexation of Crimea and the West’s intervention in the conflict in Ukraine. Since then, economic sanctions have been imposed on Russia, prompting Moscow to diversify its currency reserves and decrease its dependence on the US dollar.