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the yuan’s share had climbed to about 30%. The change highlights the geographic shift in trade; Russia’s EU imports are only about half their pre-war levels.
The yuan appears to have replaced Western currencies in Russia-China bilateral trade. While Russia currently has stopped releasing country-level data, about 70% of Russia’s imports from China in 2021 were paid for in Western currencies and about 25% in “other currencies” (mostly yuan). The CBR reports that only about half of May imports coming from Asian countries were invoiced either in rubles or Western currencies. Unlike in exports, Russia has not succeeded in increasing ruble use in imports. For the months of April and May, the yuan’s share in invoicing was already larger than the ruble’s share. Most payments for imports coming from member countries of the Eurasian Economic Union have historically been paid for in rubles.
The CBR reports that at the monthly level payments for imports in euros and yuan have been larger than export revenues in these two currencies, implying that a portion of ruble- and dollar-based export revenues have been converted to yuan and euros. Russia’s efforts to move away from dollar-based trade and find different import providers have clearly boosted demand for Chinese yuan inside Russia. The yuan was only introduced as a traded currency on the Moscow Exchange’s foreign currency market a year ago, but its share of trading has grown steadily. In June this year, ruble-yuan trades represented 36% of currency market trading in Russia. The other top currency pairings still involve dollar or euro. In addition, the CBR’s forex operations under the government’s fiscal rule are currently conducted in yuan.
The yuan’s importance in the banking sector is still limited, but growing. For example, corporate forex deposits not denominated in dollars or euros have risen from close to zero last year to about 40% at present. While the stock of forex loans has generally shrunk, its composition has changed considerably. Share of loans issued in “other currencies” has risen to about 20%. Although the reporting does not give a detailed breakdown of currencies, the yuan apparently dominates the “other currencies” category. Broader use of the yuan is impeded by the fact that the yuan is not a freely convertible currency. The yuan only accounts for a few% of global currency trading and over-the-counter (OTC) derivatives trading conducted by banks (BOFIT Weekly 24/2022). In addition, large Chinese banks are extremely wary of doing business with counterparties subject to sanctions.
2.1 Coca-Cola left Russia but its soda is still on the shelves
Coca-Cola quit Russia, but you can still find it on the country's shelves. Russia’s 10 Coca-Cola plants were owned by an independent Greek-Swiss firm, the Coca-Cola Hellenic Bottling Company (HBC), The Bell reports.
In August 2022, Coca-Cola HBC announced the sale of its remaining Coke stocks and stated its intent to continue business under a new name: Multon Partners, the name of a Russian juice company purchased by Coca-Cola HBC in 2005. Multon’s range included a Russian cola called Dobry Cola.
19 RUSSIA Country Report August 2023 www.intellinews.com