On June 13, the Russian Central Bank said that the Chinese yuan accounted for 54% of the market share in the foreign exchange market in May.
RT reported that the Russian Central Bank has announced that the yuan/ rouble exchange rate will now set a trajectory for other currencies on the Moscow Stock Exchange (MOEX), including the euro and the USD.
The announcement comes as the latest US round of sanctions has prompted MOEX to temporarily suspend trading in USD and euro since June 12.
On June 13, the UK followed suit with the US, imposing restrictions on Russia's financial system. However, transactions in USD and euro will continue on the over-the-counter (OTC) market.
The yuan/ ruble exchange rate will become a reference point for market participants. The share of the yuan in transactions on the Moscow Stock Exchange in May was 54%. Therefore, the yuan has become the main currency in exchange transactions, said the Russian Central Bank.
According to the regulatory agency, the share of the US dollar and the euro in the Russian market has been falling steadily over the past two years due to the shift of trade flows to the East and the change of payment currencies to rubles, yuan and other currencies of friendly countries.
Russia has been actively replacing the US dollar and the euro in foreign trade amid Western sanctions imposed on the country over the Ukrainian conflict. Since then, Moscow has significantly reduced the number of bank accounts and transactions between companies and financial institutions related to Western currencies. Before the conflict, the share of the US dollar and the euro in Russian payment transactions was around 90%.
Russian President Vladimir Putin said last week at a plenary session at the St. Petersburg International Economic Forum. Petersburg said the payment rate for Russian exports in a currency known as the "toxic" of unfriendly countries had fallen by half.
Mr. Putin said that the share of rubles in Russia's foreign trade activities continues to increase while currency payments from "unfriendly" countries - countries that impose sanctions against Russia - are decreasing.
On June 13, the Moscow Stock Exchange said that the suspension of transactions in USD and euro only affects transactions in precious metals as well as transactions in securities and currencies on major Russian public exchange markets.
Except for the US dollar and the euro, all other financial instruments are still in place. The derivatives market was also not affected by these changes and trading continued normally.
