The Chinese currency the RMB Yuan outperformed the Euro by trading volume on the Moscow Exchange (MOEX) for the first time on record, according to trading data from Friday.
According to the data, the trading volume of the Chinese RMB reached 52.8 billion rubles (US$908 million). The Euro trading volume achieved 41 billion rubles (US$705 million). It was the second consecutive day when the volume of RMB yuan trading on MOEX exceeded 50 billion rubles, while in the first half of July the yuan trading volume had averaged 30 billion rubles (US$516 million) a day.
China failed to overtake the US dollar, however, with Friday’s greenback trading volume reaching 124.7 billion rubles (US$2.1 billion).
Analysts suggest the growth in the RMB trading volume on MOEX stems from banks’ devaluation actions and speculation on currency interventions, which may take the form of China RMB purchases as part of Russia’s much anticipated new budget rule.
The rule has not yet been approved, but the Bank of Russia has already allowed non-resident banks from “unfriendly” countries to trade one foreign currency in exchange for another on Russian foreign exchange markets. The volume of dollar-yuan transactions on MOEX, consequently, set a new historical record on Thursday, reaching 38.4 billion rubles. (US$661 million).
However, Western anti-Russian sanctions also contribute to the RMB appeal. Due to sanctions, bank clients are seen gradually switching from currencies of “unfriendly” countries, primarily the US dollar and the Euro. The trend among individuals and legal entities, with importers forced to switch to conducting transactions in currencies that are not influenced by sanctions, while within Russia, the interest of Russians in the RMB is a reflection of buying dollars or euros being both currently both risky – and expensive.