– Friends constantly ask: “Why do you buy yuan and not dollars?” Yes, because the yuan is cheaper!
Photo: Shutterstock
August once again proved the picture of the worst month for the ruble. The exchange rate of our currency has fallen sharply. Is it worth it in such conditions to switch to a friendly currency – the Chinese yuan? Is it easy to buy yuan, is it possible to make money on it, and how easy is it to pay abroad? Let’s figure this out.
ALTERNATIVE TO THE DOLLAR AND EURO
bound to disappoint. If you look at the statistics, it turns out that the exchange rate of the Chinese yuan changes against the ruble in almost the same way as the dollar and the euro (for more details, see “Clearly”). Growth since the beginning of the year amounted to around 30%, while the dollar and euro rose around 40%. That is, there is not much difference in what to store free money: in “unfriendly” currencies or in “friendly” currencies. But there are nuances. This is how to invest in RMB.
clearly
Photo: Dmitry POLUKHIN
RMB CASH…
This used to be the Chinese coin was an exclusive product. Only a few banks opened accounts and deposits in it. Now there are more opportunities. You can buy cash without any problem. In the boxes of the big banks, they almost always are. Another thing is that when buying cash currency now you have to pay a decent commission. And the bigger the bank, the bigger the difference between buying and selling. Hence the advice: it is more profitable to buy cash yuan in smaller banks. Better yet, use online aggregators that collect offers from different banks (banki.ru, sravni.ru, cash.rbc.ru). There you can find the most favorable rate for both buying and selling.
…NO CASH…
However, in most cases, you won’t need cash in Chinese currency. Yes, if you go to China, it will definitely come in handy there. In other countries, dollars and euros are more easily accepted than the yuan. This means that the commissions at exchangers when selling Chinese currency will be higher.
A good alternative is the non-monetary yuan. It can also be bought at almost any Russian bank – convert your rubles into a certain amount of yuan. Open a Chinese currency account and then a deposit. On them you can now earn 2.5 – 4% per annum.
True, there is also a nuance here. You will have to buy Chinese currency at the bank’s internal exchange rate. Not the fact that it will be profitable. Also, you will not be able to withdraw your yuan in cash even after the end of the deposit period. Since March 9, 2022, the restrictions of the Central Bank are in force. According to them, money in any currency (even in dollars, even in yuan) can only be withdrawn in rubles at the bank’s exchange rate on the day of issue.
… AND EXCHANGE
It is more profitable to buy any currency in a brokerage account. There the commissions are much lower than in a bank. In this case, no additional movements are required. Everything can be done in your bank’s mobile application (better than a big one). Buy through a brokerage account the amount you need. And then transfer to a bank account. Within the same bank, this operation does not usually cost a penny.
It is true that it is not very reasonable to simply keep money in an account or even in a deposit. Inflation eats up not only rubles, but also savings in other currencies. Prices are rising in the United States, in Europe and in China. To at least partially offset this growth, it is better to keep money in profitable instruments.
For example, on the Moscow Stock Exchange you can buy bonds of large Russian companies (Polyus, Metalloinvest, Sovcomflot and others) denominated in Chinese currency. They give a return even higher than on a deposit: 4 – 7% per annum. Thus, you will gain both in the potential growth of the yuan exchange rate and in the coupons that businesses will collect. Everything is official and transparent. If you buy these securities through the brokerage app of a large Russian bank, there is no risk of losing money. Bonds are safer than stocks. In essence, you are lending to a large company. And she agrees to pay you a certain percentage several times a year.
QUESTION – RIB
But what about UnionPay?
This is the Chinese analogue of the international payment systems Visa and Mastercard. It operates in 180 countries of the world. Many Russian banks hastily began issuing cards of this payment system last year. But since then, some realities have changed. Some banks were subject to harsh US sanctions. As a result, your cards have turned into ordinary plastic and no longer work abroad.
According to the latest information, there are now only six banks in Russia whose UnionPay cards are still accepted abroad: Gazprombank, Russian Standard, Rosselkhozbank, Post Bank, Primsotsbank and All-Russian Regional Development Bank (RRDB). You can store on this card both yuan and any other currency: dollars, euros, rubles. True, as practice has shown, UnionPay cards are constantly accepted only in Asian countries. In Europe, only in tourist places where Chinese tourists often visit. And yes, the system crashes frequently. Either because of the sanctions, or because of the underdevelopment of the payment infrastructure.
IMPORTANT NUANCES
The exchange rate of the yuan is constantly growing against the ruble. And even a little to the dollar. For example, exactly 10 years ago for one yuan they gave a little more than 5 rubles. And now – almost three times more (about 13 rubles). Since the beginning of the year, the appreciation of the yuan has amounted to around 30%. However, there is no guarantee that this will continue to be the case in the future. Therefore, investing all your savings in Chinese currency or any other foreign currency is not worth it. It is better to limit yourself to a part of 20-30%. We spend money mainly in rubles. This means that it is better to place them in ruble financial instruments.
