Subject. The dynamics of the Chinese yuan exchange rate against the US dollar, the impact of macroeconomic and monetary variables on the share of settlements in national currencies between the Russian Federation and the People’s Republic of China, as well as the relationship between China’s currency policy and the dedollarization of bilateral trade. Objectives. To identify the key determinants shaping the direction and intensity of the transition to settlements in national currencies. Methods. Econometric methods were employed, in particular, the construction of multiple regression models using the ordinary least squares (OLS) method with robust standard errors. Results. The main factors determining the dynamics of the exchange rate and the development of settlements in national currencies are the inflation rate, the volume of foreign exchange reserves, the unemployment rate, the USD/CNY exchange rate, and the key interest rate of the People’s Bank of China. It has been established that tightening of monetary policy and weakening of the yuan against the dollar have a restraining effect on the growth of the share of national currencies in bilateral settlements, as they increase borrowing costs and reduce the attractiveness of transactions in yuan and rubles. Conversely, maintaining exchange rate stability and moderate inflation rates fosters greater confidence in national currencies and expands their use in foreign trade settlements. Conclusions and Relevance. Monetary factors in the PRC exert a predominant influence compared to the macroeconomic indicators of the Russian Federation. The results can be used when implementing measures of currency and financial regulation, as well as in developing strategies aimed at deepening financial and economic cooperation between the Russian Federation and the People’s Republic of China.
Keywords: econometric modeling, exchange rate, monetary policy, Russia, China
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