Russian Ruble Stumbles as Yuan Trading Volumes Jump to Record

Since February 2022, the war in Ukraine has contributed to the acceleration of turning the compasses of Russia’s eastwards and sent local demand for China’s yuan to record highs. This has helped to tame a four-month ruble rally that has accumulated pressure on companies and the budget.

Trading volume in the yuan-ruble pair increased to the highest ever this week and hit a daily record of 7.82 billion yuan ($1.16 billion) on Wednesday, according to Moscow Exchange data. Volumes for the yuan-ruble currency pair are now higher than for the euro-ruble pair, the figures show. The ruble is this month’s worst performer against the dollar among 23 emerging-market currencies.

Russians are embracing the Chinese yuan as Western sanctions on Moscow get intensified. On a move meant to diversify away from the dollar and euro. Purchases of the yuan have jumped eightfold since May 20, when Russia’s central bank eased foreign exchange restrictions.

The Chinese yuan has shown stability and relatively low volatility in recent years, and it can become the main tool for diversifying forex savings. Russian have also stepped up purchases of the British pound and Swiss franc by two-and-a-half times, while dollars and euros saw less demand.