It has just got a lot more expensive for Russia to deal with its biggest trade partner China.
The yuan hit a record high against the ruble this week – surging by as much as 25% on Tuesday alone – as sanctions were levied against the Russian central bank. Some Chinese banks have suspended trading of the currency pair, with signs of distress showing up in the widest ever bid-ask spread.
The sudden spike, and how it has put off currency trades, raises questions over the strategic relationship between both countries as Russia’s ties with global markets gets cut off one by one. Total bilateral trade between the two countries was valued at $112 billion in 2020, according to Bloomberg calculations based on data from the International Monetary Fund.