Russia has seemingly resolved its yuan shortage, which previously drove short-term borrowing costs to extreme levels after US threats to sanction banks facilitating cross-border payments, Bloomberg reported.

Since its exclusion from Western markets after the onset of the Ukraine war, Russia has increasingly depended on China as its primary trading partner. However, concerns over secondary sanctions briefly disrupted Moscow’s transition to the Chinese currency, driving the overnight yuan borrowing rate, Rusfar, to a staggering 200% in September.

Now, that gauge has dropped below zero, signaling a return to surplus as Russia finds alternative payment channels to navigate the sanctions.

"Russia’s yuan money market has recovered, which suggests that Russians have discovered reliable workarounds to bring yuan rates down,” said Alex Isakov, an economist at Bloomberg Economics.

He pointed to the spread between Rusfar and onshore yuan rates as an indicator of the sanctions’ impact since the local benchmark was introduced in 2023.

State-owned VTB Bank PJSC, which operates a branch in Shanghai, addressed its liquidity challenges by purchasing foreign currency from exporters with a "certain margin", according to the bank’s chief, Andrey Kostin.

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