The Russian rouble has strengthened to its highest level against China’s yuan since February 2023, ahead of President Vladimir Putin’s visit to China, where new business agreements are expected to be discussed, News.Az reports, citing Reuters.

Kremlin foreign policy aide Yuri Ushakov said before the visit that “practically all” payments in the roughly $240 billion trade between Russia and China are now conducted in rouble and yuan.

He said this arrangement helps shield the two countries from Western sanctions.

Data from the Moscow Exchange showed the rouble strengthening to 10.45 per yuan. Against the U.S. dollar, the currency also moved past the 72 level on Tuesday for the first time since March 2023, according to LSEG data.

Analysts say the rouble is being supported by several factors, including high oil prices driven by geopolitical tensions in the Middle East, a surprise 30-day extension of the U.S. sanctions waiver for Russian oil, and expectations of new economic agreements between Moscow and Beijing.

Bank Saint Petersburg analysts noted that, in addition to increased currency sales by exporters, the rouble may also be benefiting from market expectations surrounding upcoming talks between Russian and Chinese leaders.

Putin and Chinese President Xi Jinping are expected to discuss new energy cooperation, including the proposed Power of Siberia 2 gas pipeline. The project would transport gas from Russia’s Yamal Peninsula in West Siberia to China.

China remains the largest buyer of Russian oil, and energy cooperation continues to be a central element of trade between the two countries.

News.Az 

By Nijat Babayev