China will double the allowed trading range between its currency and Russia’s rouble to boost trade between the two countries as the Russian economy struggles from sanctions.
- The China Foreign Exchange Trade System (CFETS) reported that it would expand the daily trading band for the renminbi’s exchange rate with the rouble, permitting the currency cross to trade 10% in either direction of the daily point set by PBOC.
- CFETS stated that the new trading ban would be implemented starting from Friday, with the approval of PBOC and the State Administration of Foreign Exchange.
- China has desisted from hitting Russia with sanctions even as Western nations imposed a series of economic punishments for Moscow’s invasion of Ukraine.
- Ken Cheung, chief Asian foreign exchange strategist at Mizuho Bank, stated that it would facilitate trade and improve market liquidity for the renminbi-rouble exchange rate.
After the recent sanctions were imposed, Chinese state media have indicated the opportunity for the nation to boost the use of its own cross-border payments system.
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Source: FT