Central Bank announces yuan to take place of dollar as Russia`s main currency
(MENAFN) The bank of Russia announced on Thursday a pivotal shift in currency dynamics, highlighting that the yuan/ruble exchange rate will now dictate the trajectory of currency pairs on the Moscow Exchange (MOEX), displacing traditional benchmarks such as the euro and dollar. This move follows recent actions where the MOEX suspended trading in dollars and euros in response to new rounds of United States sanctions. The United Kingdom subsequently followed suit, implementing restrictions targeting Russia's financial system.
In a statement, the Bank of Russia underscored that the yuan/ruble exchange rate will serve as a fundamental reference for market participants, signaling a significant milestone as the yuan now dominates exchange trading with a notable 54 percent share observed in May. This development solidifies the yuan's status as the primary currency in Moscow Exchange transactions.
Over the past two years, the regulator noted a steady decline in the market share of the dollar and euro within Russia, attributing this shift to redirected trade flows towards Eastern partners and a strategic transition towards settling transactions in rubles, yuan, and currencies of allied nations. This strategic pivot away from Western currencies comes amid heightened geopolitical tensions stemming from sanctions imposed over the Ukraine conflict.
Russia's proactive measures to diminish reliance on the dollar and euro in foreign trade have included substantial reductions in bank accounts and transactions involving Western currencies among companies and financial institutions. Prior to the conflict, the United States dollar and euro collectively accounted for approximately 90 percent of Russia's settlements, marking a notable transformation in financial strategies and international economic relations.
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