The ruble is scraping along the bottom. Will Siberian companies switch to the yuan?

According to the Russian website sibreal.org, some companies in Siberia have already decided to switch to the Chinese currency. According to experts, in many parts of the country the ruble may be completely replaced by the yuan.

The ruble’s condition is terrible

Since Russia attacked Ukraine, the Russian currency has been in terrible shape. It reached its lowest level in 16 months in August. The dollar exchange rate has exceeded 100 rubles, which makes imports more expensive.

A weak ruble includes, among others: the effect of the rampant inflation in Russia. According to official data, price growth accelerated by 5.15% in August. and exceeds the central bank’s inflation target by 4 percentage points. Even Russian leader Vladimir Putin admitted that high inflation hinders the country’s economic development and inhibits business.

However, according to experts, the situation is much worse than shown by official statistics published by Rosstat (the equivalent of the Polish Central Statistical Office). According to estimates by the independent research company Romir, inflation in Russia was 45 percent last year and is currently over 16 percent.

It is therefore not surprising that residents of some Russian regions, especially the poorer ones, are more willing to look for alternatives to the cheap, unstable currency that is currently the ruble.

Crisis currency

Moving away from a weak currency in times of crisis is nothing new in Russia, especially in Siberia. The sibreal.org portal reminds us of the huge economic crisis in the mid-1990s, which occurred after the liberalization of prices and the introduction of a number of economic reforms.

Siberia then introduced “catavans”, which were a form of coupon that could be exchanged for goods in stores. This local “currency” was then more stable than the ruble.

– There will be no new “catavans”, but the yuan may replace them – says economist Dr. Igor Lipsitz in an interview with the portal. – When the national currency loses value, people look for a more or less reliable currency. In some countries it is the dollar. It happens that a country has no national currency at all, only dollars. But in Russia, the situation with dollars is not very good at the moment, so the yuan remains, which may become an alternative currency. You received the yuan, spent it on goods, and the merchant used it to buy new goods. China is currently the main importer of all kinds of goods to Russia.