Russia jumps to 3rd- largest market for yuan payments, ‘may climb further’

Russia became the third-largest market using the Chinese yuan for global payments in July as bilateral trade remained normal amid Western sanctions, observers said. Meanwhile, the yuan retained its rank as the fifth most active currency for global payments by value, signaling a stable internationalization pace.

According to a report from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), Russia became the third-largest market for yuan payments, with Russian firms and banks accounting almost 4 percent of international yuan payments by value in July, a jump from seventh place in June.

Russia’s increasing use of the yuan came amid increasing recognition of the currency in the international markets. The yuan’s global share stood at 2.2 percent in July, up from 1.86 percent in June, and it was behind the US dollar, the euro, the British pound and the Japanese yen. The US dollar and the yuan were the two currencies for which use expanded in the month.

“The increasing share is a vivid demonstration that the yuan’s recognition and acceptance have grown steadily worldwide, backed by a relatively stable exchange rate compared with other major currencies despite global volatility,” said Dong Dengxin, director of the Finance and Securities Institute of the Wuhan University of Science and Technology.

Dong noted that the share of the yuan’s use in global trade would be even higher if calculated using some border trade transactions.

The SWIFT report showed that Russian firms and banks were involved in almost 4 percent of international yuan payments by value in July. That was an increase from 1.42 percent the previous month and from zero in February.

Observers attributed the jumping share to stable trade between China and Russia amid US-led Western sanctions. both expanding from June.

“If the sanctions on Russia continue, the share will continue to increase,” Dong said.