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Russian business lobby calls for c. bank to accelerate yuan reserves

September 30, 2022
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  • This content was produced in Russia, where the law restricts coverage of Russian military operations in Ukraine.

MOSCOW, Sept 30 (Reuters) – Russia’s top business lobby on Friday urged the central bank to build up its reserves of the Chinese yuan in a bid to stabilize the ruble, which is prone to wild bouts of volatility and is trading near multi-year highs.

The Russian Union of Industrialists and Entrepreneurs (RSPP) said Russia must increase its purchases of yuan and currencies from other “friendly countries” to help “stabilize” the value of the Russian currency.

The ruble has surged amid Moscow’s tight capital controls and a slump in imports. Russian businesses say a strong currency hurts their competitiveness, and the government favors an exchange rate of 70-80 to the dollar.

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On Friday, the ruble traded in a very wide range of 53.20 to 58.35 against the greenback.

According to the RSPP, the Russian Treasury should issue yuan-denominated bonds, which can then be bought by both the central bank and private investors. Selling rubles to buy foreign currency was supposed to weaken the value of the Russian currency by increasing its supply on the foreign exchange markets.

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Before it was hit by unprecedented sanctions that froze about half of the central bank’s international reserves, Russia bought tens of billions of dollars worth of foreign currency and gold every year.

Moscow has since accelerated a campaign to reduce the role of the dollar, euro and other Western currencies in its financial system.

The Moscow Stock Exchange, Russia’s largest stock market, announced earlier this week that it expects trading volume in the ruble-yuan pair on its platform to surpass dollar-ruble deals next year.

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In a letter to the Ministry of Finance and the central bank, the RSPP also called on the country to “intensify its efforts… to provide financial institutions of friendly countries with access to Russia’s stock exchange infrastructure.”

Russia has barred banks and investors from most foreign markets since February. Countries that have not imposed sanctions on Russia since the start of military action in Ukraine are considered “friendly”.

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Reuters reporting; Edited by Alex Richardson

Our standards: The Thomson Reuters Trust Principles.