Chinese yuan RMB outperforms euro on Moscow Stock Exchange for first time

China’s currency, the RMB Yuan, outperformed the euro in trading volume on the Moscow Stock Exchange (MOEX) for the first time on record, trading data showed on Friday.

According to the data, China’s RMB trading volume reached 52.8 billion rubles ($908 million). The volume of transactions in euros reached 41 billion rubles ($705 million). It was the second day in a row that the RMB yuan trading volume on the MOEX exceeded 50 billion rubles, while in the first half of July the yuan trading volume averaged 30 billion. rubles ($516 million) per day.

China, however, failed to overtake the US dollar, with greenback trading volume reaching 124.7 billion rubles (US$2.1 billion) on Friday.

Analysts suggest the growth in RMB trading volume on the MOEX stems from devaluation actions by banks and speculation in FX intervention, which could take the form of Chinese RMB purchases under the new rule. Russia’s long-awaited budget.

The rule has not yet been approved, but the Bank of Russia has already allowed non-resident banks from “unfriendly” countries to exchange one foreign currency for another on Russian currency markets. The volume of dollar-yuan transactions on the MOEX therefore set a new all-time high on Thursday, reaching 38.4 billion rubles. ($661 million).

However, Western anti-Russian sanctions also contribute to the appeal of the RMB. Due to the sanctions, bank customers are gradually turning away from the currencies of “unfriendly” countries, mainly the US dollar and the euro. The trend among natural and legal persons, importers being forced to switch to transactions in currencies that are not influenced by the sanctions, while in Russia, the interest of Russians in the RMB reflects the fact that the buying dollars or euros is currently both risky – and expensive.

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Briefing Russia is written by Dezan Shira & Associates. The company has 28 offices across Eurasia, including China, Russia, India and ASEAN countries, assisting foreign investors in the Eurasian region. Please contact us at [email protected] for Russian investment advice or assistance with market intelligence, legal, tax and compliance issues throughout Asia.

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