22 Mar 2023 10:03

Russia wants to expand settlements in yuan beyond China to third countries - Putin

MOSCOW. March 22 (Interfax) - Russia wants to more actively use yuan in foreign trade settlements with third countries as well as with China, President Vladimir Putin said.

"National currencies are being increasingly used in mutual trade. We should continue to encourage this practice, as well as expand the mutual presence of financial and banking institutions on the markets of our countries. As I've already said, two thirds of the trade between our countries is already done in rubles and yuan," Putin said at talks with Chinese President Xi Jinping in the Kremlin.

"We are in favour of using Chinese yuan in settlements between Russia and countries in Asia, Africa, Latin America," Putin said, adding that "these forms of settlements will develop between Russian partners and their colleagues in third countries."

Russia's Central Bank reported in March that the share of yuan in settlements for Russian exports, which was within the bounds of statistical error at the beginning of 2022, surged to more than 10% over the course of the year.

At the beginning of 2022, payments for exports were primarily made in U.S. dollars and euros, and the overall share of the currencies of countries subsequently deemed "unfriendly" amounted to 87%. Rubles accounted for 12% and the share of the yuan did not exceed 0.5%.

By the end of the year, the share of "toxic" currencies in payments for exports shrank to 48%, while the share of rubles and yuan grew to 34% and 16%, respectively, and the share of other currencies of "friendly" countries amounted to 2%, the Central Bank said in a report.

The currency breakdown of payments for imports also changed dramatically, though less than for exports. The share of "toxic" currencies shrank from 65% in January 2022 to 46% in December, while the share of yuan grew from 4% to 23%. The share of the ruble even dropped somewhat, from 29% to 27%, and the share of other "friendly" currencies amounted to 4% at the start of 2023.