De-dollarisation: Russia, China boycott dollar, using national currencies for over 90% of mutual payments

Russia and its ally China have “almost completely” ditched the US dollar to settle bilateral trade. Instead, they are using their own currencies, the yuan and rouble. According to Russian Foreign Minister Sergey Lavrov, more than 90 per cent of mutual payments between the two countries are being done in their national currencies.

Russia-China trade actively developing

At a meeting of the Council of Heads of Russian regions under the Foreign Ministry, Lavrov said: “Russian-Chinese trade and economic cooperation are actively developing, despite the persistent attempts of the states of the collective West to put a spoke in the wheels.”

“There has been an almost complete de-dollarisation of bilateral economic relations. Today, more than 90 per cent of mutual payments have been transferred to national currency,” he further said.

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Lavrov went on to say that the supply of Russian agricultural products to the Chinese market has been growing.

“Interaction in the energy sector is steadily advancing. Joint projects are being implemented in the investment and industrial areas. The mutual benefit from such cooperation is clearly felt on both sides of the Russian-Chinese border,” the Russian Foreign Minister said.

In November last year, Russia’s First Deputy Prime Minister Andrei Belousov also said that settlements in roubles and yuan in bilateral trade had reached 95 per cent.

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In February, Russian central bank governor Elvira Nabiullina had said China’s yuan became the “primary” foreign currency for Russia’s overseas economic activity as Western sanctions choke Moscow’s economy.

“Now, foreign economic activity is very actively switching to the use of other currencies, primarily the yuan," Nabiullina told in an interview with Russian news agency RIA Novosti.

For the unversed, China has for long been making efforts to boost the Yuan’s global appeal as an alternative to the US dollar for international settlements and as a reserve currency.

Russia-China trade ties

Trade between Russia and China reached a record high of over $200 billion in 2023.

Russia’s Minister of Economic Development, Maksim Reshetnikov in December last year had said that between January and October 2023, 68 per cent of Russia-China trade was settled using the respective national currencies.

Economic ties between Russia and China rose since Vladimir Putin’s troop invaded Ukraine in 2022 and the West imposed sanctions.

As per reports Russia has been using the yuan in settling trade transactions with Mongolia, the Philippines, Malaysia, the United Arab Emirates, Thailand, Japan, Tajikistan and Singapore.

With inputs from agencies