MOSCOW, May 19 (Reuters) – The Russian rouble hit its strongest level against China’s yuan, Russia’s most traded foreign currency, since February 2023 on Tuesday ahead of President Vladimir Putin’s visit to China with new business deals on the agenda.
Kremlin foreign policy aide Yuri Ushakov said ahead of the visit that “practically all” payments in the $240 billion trade between the two countries are now made in yuan and rouble, which shields them from Western sanctions.
The Moscow Exchange data showed that the rouble strengthened to 10.45 against the yuan. Against the U.S. dollar the rouble crossed to the stronger side of the 72 mark on Tuesday for the first time since March 2023, LSEG data showed.
The rouble is supported by high oil prices as a result of the war in the Middle East, a surprise 30-day extension of the U.S. sanctions waiver for Russian oil and by expectations of new business deals between Russia and China.
“Apart from the factor of increased currency sales by exporters, the rouble could also be supported by news surrounding the planned content of talks between the leaders of Russia and China,” Bank Saint Petersburg’s analysts said.
Putin and Chinese leader Xi Jinping are expected to discuss new energy deals, including the Power of Siberia 2 gas pipeline that would bring gas from the Yamal Peninsula in West Siberia to China. China remains the largest buyer of Russian oil.
Russia boosted oil supplies to China by more than a third to 31 million metric tons in the first quarter of this year, Ushakov said on Monday.
The rouble is up 12% against the dollar and by 11% against yuan since April 1, tracking the rise in oil prices and Russia’s energy revenues. Many forecasters consider Russia one of the main beneficiaries of the war in the Middle East which led to an unprecedented disruption of energy supplies.
(Reporting by Gleb Bryanski; Editing by Chiara Rodriquez)
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