The Chinese currency now accounts for the largest share of forex trading, the regulator reports

The share of the Chinese yuan on Russia’s foreign exchange market hit an all-time high in March, the Bank of Russia (CBR) reported in its financial risk review on Monday.

Russia’s shift away from major Western currencies started with the US and EU sanctions imposed on the country over the Ukraine conflict. The financial restrictions made cross-border trade in euros and dollars more difficult and their presence on the domestic foreign exchange market less important.

The turnover of exchange-traded yuan amounted to 53% last month compared to 46.6% in February, according to the CBR. The share of renminbi in over-the-counter trading also posted a record high, reaching 39.6%.

Meanwhile, the share of Western currencies, including the US dollar and the euro, dropped to 46.4% on the exchange in March from 52.8% the previous month, data showed. In the over-the-counter segment, the share of the greenback and euro also continued to decline, decreasing to 54.7% from 59.8% in February.

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Analysts say the changes in the yuan and dollar trading volumes reflect Russia’s shift away from transacting in the currencies of so-called ‘unfriendly’ countries against the backdrop of international sanctions.

The restrictions include the blacklisting of a number of Russian banks and their removal from the SWIFT interbank messaging system, as well as bans on transactions with Russian financial entities and the freezing of foreign exchange reserves.

Meanwhile, Russia continues to establish the conditions for settlements in various national currencies, according to CBR Governor Elvira Nabiullina. Over the past year, the volume of settlements in currencies other than the dollar and euro has surged from 39% to 67%, according to her.

A number of Russian officials including Finance Minister Anton Siluanov, have repeatedly said the country no longer trusts the US currency, calling it “a completely unreliable instrument.”