The transition to yuan settlements faced obstacles following the expansion of US restrictions in June 2024. Chinese financial institutions began reducing operations with Russian counterparties, fearing US sanction pressure.
Consequences for settlements and business
Due to difficulties in making direct payments, Russian companies are forced to engage intermediaries and use third countries to conduct transactions. This leads to rising costs, slower transfer speeds, and reduced predictability regarding the timing of funds arrival.
Settlement indicators
Despite the ongoing growth in trade turnover with China, the yuan's share in export operations has halved compared to the peak values in mid-2024. Meanwhile, a significant portion of revenue from Asian partners is now received in rubles.
Context
The active transition to using the yuan began in Russia after 2022, when Western sanctions limited access to dollar and euro settlements. This led to the widespread use of the Chinese currency within the Russian banking system and financial market.
