Russia Deepens Financial Ties with China Amid Western Sanctions


  • With a growing dependence on Beijing and its boundless partnership, Russia is increasing its energy supplies and purchasing more Chinese goods.
  • Yuan trading accounted for nearly 42% of all foreign currency trading on Moscow Exchange in 2023, more than a three-fold increase year on year.
  • Amid leaving behind “unfriendly” currencies like the dollar, Russia is now seeking to foster trade elsewhere.
  • China’s two-way trade with Russia in 2023 reached a record high of $240 billion, a 26.3% increase from the previous year.

Moscow’s Growing Dependence on Beijing

Moscow is increasingly leaning on Beijing, strengthening their partnership which is marked by “no limits”. This is reflected through increased energy exports to China and a surge in the purchase of Chinese goods ranging from automobiles to smartphones. European and American brands are receding from the Russian market due to Russia’s involvement in Ukraine.

Increased Yuan Trading

In 2023, nearly half of all foreign currency dealings on Moscow Exchange employed yuan – marking a rise to around 42% with a turnover of 34.15 trillion roubles ($391.5 billion). Data was sourced from the Moscow Exchange, as reported by Kommersant. Contrarily, the dollar’s share hovered around 39.5%, reducing from more than 63% the previous year.

Severing Ties with Unfriendly Currencies

In its quest to sever ties with what it now deems as “unfriendly” currencies such as dollars and euros, Moscow is increasingly looking towards alternative trading partners. Of note is China’s rising use of yuan to purchase Russian commodities.

Growth in Trade with China

In 2023, China’s bilateral trade with Russia reached an all-time high of $240 billion, a rise of 26.3% from the year before, as seen from Chinese customs data. Russia has shown steep growth in invoiced imports in yuan while also marking a notable growth in over-the-counter trading of the Emirati dirham and Indian rupee, though exchange trading in those currencies is yet to be initiated.

(*Note: $1 corresponds to 87.2290 roubles)

Implications for Forex Trading

The shifts in Russia’s trade trends and currency preferences certainly carry weight for forex trading and related assets. Traders would do well to closely monitor this evolving landscape.

PIP Penguin