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When Russia's foreign exchange reserves were frozen and the country was cut off from the SWIFT messaging system in light of the Ukraine conflict, Moscow turned to other settlement options, including the yuan. However, Russia is by no means alone in making use of the Chinese currency. In recent years, several other major global economies have already begun using the yuan or are considering doing so. As Russia and many nations in the Global South seek to extricate themselves from the increasingly capricious dollar hegemony, the prominence of the yuan is only set to rise.
RT examines which major countries are turning toward the Chinese currency.
1. RussiaRussia far and away leads the pack in terms of the use of the yuan. Having borne the brunt of the increasingly draconian weaponization of the Western financial system that has essentially precluded Russia from euro and dollar settlements, Moscow has increasingly been using the yuan in foreign trade.
The Chinese currency was used in 34% of Russian imports and 25% of exports as of July 2023, according to the most recent data available from Russia's central bank. Some of that increase is attributable to increased imports from China itself, but use of the yuan to settle imports from third countries - those with swap lines open with China's central bank - has also risen.
However, the penetration of the yuan in Russia goes far beyond trade settlement. Russia is now the third-largest clearing center for offshore yuan transactions.
The yuan has become the most traded currency on the Moscow Exchange, while the first yuan-denominated exchange-traded fund launched on the exchange in January 2023. The yuan now has a more prominent place in Russia's sovereign wealth fund after a restructuring in late 2022 aimed at reducing Russia's exposure to the currencies of so-called unfriendly countries (those that support sanctions). Meanwhile, a number of major Russian corporates have floated yuan-denominated bonds over the past two years, a move that underscores the currency's growing importance beyond trade. Aluminum giant RUSAL was the first to tap the yuan market, followed by oil major Rosneft and gold miner Polyus.
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