Report: "Russia uses the yuan for 25% of its trade with the rest of the world"

With the outbreak of the war in Ukraine, Russia has further fueled the de-dollarization trend by concluding more contracts with its trading partners using the yuan, with China's currency now accounting for a large share of the Kremlin's imports and exports, according to Business Insider.

The yuan was used to pay for 75% of Russia's transactions with China and 25% of Beijing's exchanges with other countries in the first half of 2023, according to a report published by the RBC station in Moscow, citing data from the Ministry of Economic Development in Russia. This, given that Western countries have frozen more than half of the Kremlin's foreign exchange reserves, after President Vladimir Putin invaded Ukraine in February 2022, writes the American publication.

Basically, the measures imposed by the West have forced the Kremlin administration to move away from what it calls "toxic currencies", which has propelled the yuan, its share of Russian imports rising from 4% to 23% last year, according to Reuters. So-called "toxic currencies" now account for only 28% of Russia's exports and 31% of its imports, according to the report.

Before the outbreak of war, they were used to settle 87% of Russia's export and 67% of import payments. Russia's embrace of the yuan is part of a broader global effort to de-dollarize, with Brazil, China, India, South Africa and several other countries trying to reduce the dominance of the dollar to diminish Washington's economic power.

According to Business Insider, China asked Middle Eastern suppliers to accept the yuan instead of the dollar for oil transactions in December, while from March 2022 Russia stopped accepting countries it labeled as "unfriendly" to contracts with the Kremlin for natural gas in a currency other than the ruble, according to Business Insider.

Despite these things, in the first quarter of the year, the yuan represented only 2.6% of the world's foreign exchange reserves, while the dollar held a share of 59%, according to data from the International Monetary Fund, according to the American publication.