RUSSIA's central bank said it has no better options than the Chinese yuan for its reserves after two years of its war on Ukraine and the seizure of its international assets, reports Caixin.
There are limited alternatives to China's currency for use as reserves because the financial instruments of nations that are friendly to Russia carry too many risks, the central bank wrote in its annual report.
'The exchange rates of these currencies are highly volatile, the markets have low liquidity, and in a number of such countries there are restrictions on the movement of capital, which is an obstacle to their use,' the report said. 'These factors predetermine the key role of the Chinese yuan in the formation of reserve assets.'
China has played an increasingly important role in Russia's economy as President Vladimir Putin has sought to reorient trade toward Asia and away from Europe. Trade with Beijing has been a key factor in allowing Russia's economy to weather the sanctions, along with increased government spending.
SeaNews Turkey
There are limited alternatives to China's currency for use as reserves because the financial instruments of nations that are friendly to Russia carry too many risks, the central bank wrote in its annual report.
'The exchange rates of these currencies are highly volatile, the markets have low liquidity, and in a number of such countries there are restrictions on the movement of capital, which is an obstacle to their use,' the report said. 'These factors predetermine the key role of the Chinese yuan in the formation of reserve assets.'
China has played an increasingly important role in Russia's economy as President Vladimir Putin has sought to reorient trade toward Asia and away from Europe. Trade with Beijing has been a key factor in allowing Russia's economy to weather the sanctions, along with increased government spending.
SeaNews Turkey
