Russia's Central Bank added the Chinese yuan to reserve currency basket

Central Bank of Russia has added the Chinese yuan to the foreign exchange reserve basket, that the country used to purchase gold reserves. However, so far the bank has no plans for purchasing operations of yuan-nominated assets in the near future.

According to the bank’s third quarterly report for 2015, on December 31, 2014, the share of US dollar in the Russian reserves was 44%, euro accounted for 42% and British pound — for 9.5%. The reserves also include smaller amounts the Canadian and Australian dollars, the Swiss frank and the Japanese yen.

The decision to add the yuan was made in mid-November. The Central Bank has not carried out any operations on physical buying of the yuan yet.

"The Central Bank has added the yuan to the basket of reserve currencies," one of the sources said.

According to both sources, the share of Russian reserves in yuan in the near future will remain small and symbolic. The press service of the Central Bank said that the composition of reserves is officially unveiled with a six month delay.

The Moscow Exchange, where the Central Bank could theoretically buy currencies for reserves, began to trade in yuans in late 2010. Since then, the volume of trading in this currency has significantly increased. In August, trading volume grew 4 times year-on-year to an absolute maximum and amounted to 18 billion yuan (191 billion rubles - $2.8 bln). Purchases by the regulator will increase the demand for the Chinese currency.

The Russian authorities announced a turn to the East, after the country found itself under sanctions of Western countries following the events in Ukraine. The sanctions in particular deprived Russia of the access to Western capital markets and technologies for developing hard-to-reach oil and gas deposits.

Russia and China plan to sign an agreement that will allow the two countries to build the necessary infrastructure to buy assets denominated in national currencies.