Chinese Yuan Overtakes Euro In Russian Foreign Trade Business Settlements

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The Chinese Yuan has become more popular than the Euro in foreign exchange settlements of Russian SMEs this year, according to a study by Promsvyazbank (PSB). China’s currency was used in 31% of all transaction against 28% utilizing Euros, a trend that can be explained by the EU imposing sanctions upon Russia, freezing Russian Euro-denominated assets and cutting Russia off from the SWIFT banking network.

This trend has also been confirmed in other large Russian banks, including Tinkoff, Absolut Bank, Zenit, VTB and Tochka, with Russian credit institutions adding that in connection with this they are launching new products in “soft currencies”. The popularity of the Chinese Yuan among exporters confirms the reorientation of Russian business to new markets, in particular to China. The PSB study involved over 1,700 Russian business entrepreneurs.

The US dollar was still the most utilized, comprising 34% of all transactions, but its share is falling fast. It is likely to be overtaken by the Chinese Yuan during 2023. Of the remaining foreign settlements, 4% used currencies of the CIS nations: Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan and Uzbekistan, while 3% used the UAE dirham. Only 0.5% of respondents settled with cryptocurrency in international payments.

PSB’s report noted that “The high popularity of the Yuan is due to the growth of trade with Asia and lower payment risks compared to the US Dollar and the Euro.” The report did not factor in the very recent decision by the Central Banks of Russia and India to trade in Rupees – that currency will no doubt be a major part of 2023’s foreign settlement picture, again at the expense of the US dollar which has been used as the settlement currency between the two up until mid-December this year. Russia-India bilateral trade is estimated to have reached US$40 billion this year. In 2023, none of that will be US dollar denominated.

Referring to the Bank of Russia’s December 2022 Financial Stability Review, it also follows that against the backdrop of Western sanctions, the share of settlements in “toxic” currencies on the Russian market in Q2&3 2022 decreased: from 52% to 34% in US dollars and from 35% to 19% in Euros. During this period, the share of the Russian Ruble at 32.4% has reached close to parity against the dollar (34%) in Russia’s export settlements, while the Chinese Yuan share approached that of the Euro, increasing from 0.4% to 14% in April-September. As a result, the share of instruments with the participation of the yuan in the exchange trading volume increased from 3% in March to 33% by November.

Russia’s Tochka Bank reported that over the year, 42% of their clients involved with foreign settlements used the Chinese Yuan, an increase in Yuan settlements of 294% over 2021. Tinkoff Bank also confirmed that their Russian clients involved with China were switching to Yuan. This compares with twelve months ago, when the main currency of cross-border transactions was the US dollar, and the share of payments in Chinese Yuan averaged around 10%. That trend is set to be completely reversed over 2023, as since the beginning of this year, the share of settlements in Yuan has grown by 65% and continues to increase.

Russian banks are catching up with this demand, with Moscow’s Absolut Bank for example launching a service for legal entities to open current accounts in a number of new currencies, including Belarusian Rubles and Armenian Drams. In August, the bank also made it possible for retail clients to open accounts in Yuan or Kazakhstan Tenge through mobile applications and Internet banking.

This trend has also reflected in growing popularity of Central Asian currencies. Previously, with the Kazakhstan Tenge, transactions could be counted in small numbers, as at the end of 2022, traded volumes now equal tens of millions of dollars per month. Another Asian currency to watch is the Vietnamese Dong – Russia has a Free Trade Agreement with Vietnam via the Eurasian Economic Union (EAEU) and Russia-EAEU-Vietnam trade has also boomed this year.

Dezan Shira & Associates maintain offices in China, India and Vietnam and can assist Russian businesses open bank accounts in these countries, subject to verifications. Please contact Maria Kotova at for assistance.

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During these uncertain times, we must stress that our firm does not approve of the Ukraine conflict. We do not entertain business with sanctioned Russian companies or individuals. However, we are well aware of the new emerging supply chains, can advise on strategic analysis and new logistics corridors, and may assist in non-sanctioned areas. We can help, for example, Russian companies develop operations throughout Asia, including banking advisory services, and trade compliance issues, and have done since 1992.

We also provide financial and sanctions compliance services to foreign companies wishing to access Russia. Additionally, we offer market research and advisory services to foreign exporters interested in accessing Russia as the economy looks to replace Western-sourced products. For assistance, please email or visit