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RMB becomes the main foreign currency choice in Russia

China and Russia join hands to promote the implementation of 55 huge projects. The expansion of the BRICS countries also represents a new opportunity for the renminbi

G e N Iuvinale

Recently, the 2024 Sino-Russian Economic and Trade Cooperation Fair was held in Shenyang. More than a hundred entrepreneurs, Chinese business representatives, and industry experts and scholars from Russia and related countries of the Eurasian Economic Union gathered in Shenyang to attract cooperation in channel construction, import and export trade , cold chain warehousing, financial services and other fields.

At the negotiation site, the two countries signed 55 projects with a total value of 13.6 billion yuan, further consolidating the relationship between the two countries.

According to reports, the renminbi has replaced the US dollar and the euro as the main foreign currency in Russia’s overseas economic activities.

Nabiullina, President of the Central Bank of the Russian Federation, said in the interview: “Until 2022, a large part of our foreign exchange reserves consisted of US dollars and euros, because previously foreign trade contracts were settled mainly in US dollars and euros. Now, our economic activities all Abroad there has been a very intense aggressive shift towards payments in other currencies, and mainly in yuan”.

Nabiulina said: “The share of the renminbi in the settlement of Russian export transactions has increased from 0.4% two years ago to 34.5%, and its share in import transactions has also increased from 4.3% to 36.4% in the same period".

Russian First Deputy Prime Minister Belousov also said in November 2023 that the percentage of bilateral trade settled in rubles and RMB has reached 95%.

Russian First Deputy Prime Minister Belousov also said in November 2023 that the percentage of bilateral trade settled in rubles and RMB has reached 95%.

This change is essentially linked to Western countries' sanctions against Russia, with China continuing to "finance" the invasion of Ukraine.

After the escalation of the conflict between Russia and Ukraine, in fact, Russia was excluded from the international settlement system of the Society for World Interbank Financial Telecommunications (SWIFT) and became increasingly dependent on the renminbi.

China is also working hard to increase the global attractiveness of the yuan and promote it as an international settlement currency and reserve currency capable of replacing the US dollar.

In recent years, Shenyang has actively strengthened cooperation with Russia in the fields of trade and investment, and sought to build a goods, logistics and information distribution center for economic and trade cooperation with Russia.

Shenyang City and Russia have achieved results in cooperation in many fields, including establishing sister cities, promoting cooperation on major projects, strengthening investment and trade exchanges, and promoting scientific exchanges , educational and cultural.

Data from the Shenyang Municipal Bureau of Commerce shows that in 2023, the Chinese city approved the establishment of a total of 122 Russian investment enterprises, and its import and export volume to Russia reached 4.06 billion yuan , with a year-on-year increase of 80.2%.

Among them, exports were 3.15 billion yuan, an increase of 51.9%; imports were 910 million yuan, an increase of 404.9%.

Igor Kuimov, as a member of the Board of Directors of the Russian Chamber of Commerce and Industry and President of the Moscow Oblast Chamber of Commerce and Industry, confirmed the cooperation between Shenyang and Russia and looks forward to events such as the next China-Russia Economic and Trade Cooperation Fair (Shenyang) to be held in 2024.

The expansion of BRICS countries is a new opportunity for the RMB

Nabiullina said in the interview that Russia, as the rotating chairman of the BRICS in 2024, will promote cooperation in using other currencies such as the renminbi and opening up settlement systems. Asked about the priorities and goals of BRICS central banks this year, she added: "We will have a busy agenda."

2024 will usher in the 75th anniversary of the establishment of diplomatic relations between China and Russia. According to official data, China and Russia have completed the trade goals set by the two heads of state ahead of schedule and exceeded the target in 2023, with the total annual trade exceeding US$240 billion. China has been Russia's largest trading partner for 14 consecutive years, and it is also Russia's preferred destination for importing mechanical and electrical products and exporting beef and seafood.

Cooperation projects between China and Russia in key fields such as energy, aerospace, science and technology are advancing steadily, and trade settlement and logistics channels between the two sides are becoming increasingly convenient.

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