Russia jumps to become third-largest market for yuan payments amid sanctions

Russia jumps to become third-largest market for yuan payments amid sanctions
Russia jumps to become third-largest market for yuan payments amid sanctions
© Reuters. FILE PHOTO: A China yuan note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration

LONDON (Reuters) – Russia has charged up to third place in a list of countries outside mainland China using the yuan for global payments, highlighting how it is being affected by Western sanctions.

Russia had not even been on the monthly list published by global financial messaging firm SWIFT before its invasion of Ukraine in February, but latest figures released on Thursday showed that only Hong Kong and financial powerhouse Britain are now ahead of it.

Russian firms and banks were involved in almost 4% of international yuan payments by value in July, according to SWIFT. That was up from 1.42% the previous month and from zero in February when the Kremlin’s action in Ukraine, which Moscow calls a “special military operation”, triggered sanctions.

Hong Kong unsurprisingly remains the top source of yuan transactions outside mainland China with 73.8% of the total, followed by Britain which accounted for 6.4%.

Russia charges to third on list of international yuan transactions:

Russia’s sudden leap up the list will support the argument that sanctions are working and squeezing it out of the U.S. dollar-based global banking system. But it will also back those who say it will bring Moscow and Beijing closer.

Alongside the impact on the financial sector, hundreds of big name Western firms have withdrawn or heavily cut their operations in Russia in reaction to the war.

Russia meanwhile has developed it own SWIFT-style financial messaging system, set up special accounts at some still-unsanctioned banks and continues to trade key exports like oil with countries from China and India to Turkey.

The latest SWIFT data also confirmed the rouble is no longer among the top 20 global currencies used in the international payments markets.

Back in December it was in 16th place with a 0.3% share in terms of value of transaction but it hasn’t been on the list since then.

The top four places on that list are held by the U.S. dollar, euro, British pound and Japanese yen followed by the yuan in fifth spot.

(This story refiles to give more clarity in headline)

Leave a Reply

Your email address will not be published. Required fields are marked *

New Brokers
2.8 rating
Buy & sell Crypto in minutes
3.0 rating
Note: Investing involves risks. You can lose your deposit. We advise you to only invest in financial products which match your knowledge and experience.
2.0 rating
Interactive Brokers attracts active traders with low per-share pricing, an advanced trading platform.
4.3 rating
eToro is the world’s leading social trading platform, with thousands of options for traders and investors.
Risk Warning: The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory or other services by AdonFinance. In addition, the content of the website offers no opinion with respect to the suitability of any security or any specific investment. Trading foreign exchange, stocks, cryptocurrencies and commodities is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against traders. Before any investment with any broker you need to carefully consider your targets, previous experience, and risk level. Forex trading can result in the loss of your money, as a result, you are expressly cautioned that you should never invest or trade with money that you cannot afford to lose. For the avoidance of doubt, AdonFinance's service provides Brokers reviews in the Financial market. AdonFinance, its subsidiaries, agents or affiliates will assume no responsibility whatsoever for your trading activity. © Copyright 2021 AdonFinance