Russian President Vladimir Putin with Chinese President Xi Jinping.
RIA NOVOSTI/AFP via Getty Images
Russian demand for Chinese imports has ramped up to near pre-invasion levels, Bloomberg reported.
Russia bought $6.7 billion worth of Chinese goods in July, up 20% from a year ago.
As a result, local demand for China’s yuan is soaring, while the ruble has pulled back from a massive rally.
Russia is importing Chinese goods at nearly the same rate as before Moscow’s invasion of Ukraine, according to according to data from China’s customs authority compiled by Bloomberg.
In July, Russia imported $6.7 billion of goods from China, a roughly 20% increase from the same time last year, filling the market gap from Western countries that have stopped trading with the warring nation.
According to the report, Chinese car manufacturers Great Wall Motor and Geely Automobile Holdings, among others, have become top sellers in Russia over recent months as their market share grows.
The surge has boosted trade volumes in the currency market between the yuan and ruble. Last month, trading volumes for the yuan-ruble pair surged to their highest ever.
Earlier during the Ukraine war, Russia’s surging commodity prices and sharp decline of imports helped push the ruble higher. However, the jump in Chinese goods flowing into Russia has alleviated some pressure on the currency. Russia’s central bank has also cut benchmark rates and relaxed some foreign-exchange controls. In July, the ruble lost 13% against the dollar.
Meanwhile, China’s yuan is on its longest losing streak since October 2018. The currency has lost 5% against the greenback so far this year as downbeat economic data from Beijing drags it down.
The dollar, on the other hand, has strengthened in dramatic fashion, climbing 11% in 2022 as an aggressive Federal Reserve tightens monetary policy.