Yuan’s share in Russian gold and currency reserves is at its historical record of about $23 bln since spring. That has resulted in multibillion losses for Russia, Rosbalt news agency reports, as trade wars with the US caused a substantial drop in value of the Chinese currency.
The Russian megaregulator started accumulating yuans in 2017 and spent about $12 bln on the purchases. In early 2018 the Central Bank additionally bought comparable amounts of yuans. At that moment, yuan’s exchange rate was record high at 6 yuans per 1 US dollar. Yet right after that, China’s currency started losing its value because of the trade war with the United States. Ultimately, yuan has lost some 10%, and its exchange rate reached 7 yuans to a dollar. The Bank of Russia thus lost over $2.1 bln, since for whatever reason it in fact purchased Chinese currency at a top price. Given the competition between China and the USA, China is not interested in a stronger yuan, therefore, there is no point to expect the exchange rate may improve in the near future, experts say.
Last year, Russia’s Central Bank also sold all of a sudden some of its reserves in the European currency and purchased US dollars instead. The resulting loss accounted for over $4 bln.