By Anna Koroleva
This year, the yuan has become the leader in foreign currency payments among Russian businessmen. The reason for this lies both in the growth of trade with China, and in the intermediate use of the yuan for subsequent conversion into dollars or euros. And in terms of growth in use, the yuan even lagged behind several other currencies.
About 70% of transfers from the total number of foreign currency payments of entrepreneurs for the five months of 2023 were sent in Chinese yuan, the TASS agency reported, citing Tochka bank data. And thus, in five months of 2023, the yuan has become the most popular currency among domestic businesses.
In a year (June 2023 compared to June 2022), the number of yuan payments per month increased by more than five times. As noted in the message, the yuan is in demand among entrepreneurs to work with China, Hong Kong and Singapore.
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The second place in popularity is occupied by Turkish lira, which, as you might guess, is used for settlements with Turkey. Every tenth payment is sent in this currency, but the growth here is even more impressive than with the yuan: in June, the number of payments in lira increased eight times compared to autumn 2022.
In third place among the currencies popular for entrepreneurs were tenge for settlements with Kazakhstan. The number of payments here is growing from month to month: the number of payments in June 2023 increased by 75% compared to May.
It is also worth paying attention to the fact that Serbian dinars are gaining popularity - the number of accounts in this currency is less than in tenge and lira, but the growth dynamics of both accounts and payments is already obvious.
And, this time without specifying the dynamics, it points to a (quite natural) increase in the volume of payments in Indian rupees. There is also demand for stable UAE dirhams on the market, the bank said.
Two pillars: yuan and clearing
According to Georgy Zakrevsky, a public figure and founder of the Palladin consulting company, the Chinese currency deserved its growth in the share of transfers. Now the yuan is used for settlements by about 30 countries, and about 60 countries use it as a reserve currency.
This state of affairs is quite understandable, the expert believes. China is still the world's main factory. And more recently, it has also been an active geopolitical player in the African and Pacific region. The stable political situation inside the country, constant GDP growth, as well as active expansion into new markets will invariably lead to further strengthening of the yuan's position as a world currency.
At the same time, Georgy Zakrevsky believes that over time, the volume of trade with unfriendly countries will return to a more or less previous level, and then the yuan may give way to the leader among foreign currencies in terms of use in foreign trade settlements of the Russian Federation.
There is no surprise that the Chinese yuan in 2023 became the leader in foreign trade transfers, Alexey Poroshin, member of the General Council of Business Russia, CEO of First Group JSC, is sure. Because at the moment, out of 13 systemically important Russian banks, 11 are already on the US SDN list and cannot pay in any currencies, including yuan. Two of them: OTP and Raiffeisen Bank still can, but they practically do not pay.
Of the other more or less large banks, the expert points out, there are about five left that have at least some minimum limits for payments in US dollars that they carry out through correspondent accounts of American banks. Therefore, in fact, the Chinese yuan remains the only direct channel for paying for foreign economic contracts.
Also, through the Chinese yuan, funds are transferred to another jurisdiction. And then they can be converted into other currencies. At the same time, payments are now made through paying agents, when, under additional agreements to the contract, the yuan is transferred from Russia to a paying agent in Hong Kong, and there it is already being transferred into dollars or euros, Alexey Poroshin notes.
But the market is changing quickly, he adds. Already now, up to 50% of large contracts in foreign economic activity are carried out through the clearing mechanism, when money does not cross the border at all. The importer leaves the non-resident ruble in Russia and this non-resident ruble goes to the exporter. Similar movements occur with dollars or euros abroad.
This article originally appeared in Russian at expert.ru