China's mounting such a strong attack on the dollar's dominance that it's paying for almost all of its Russian oil imports in the yuan
The country has been using its own currency — the yuan — for almost all of the Russian oil it bought over the past year,reported on Thursday, citing multiple trading executives with direct knowledge of the matter.
"All seaborne Russian oil sales to China are now settled in renminbi since the price cap, sidelining the last small number of banks that were handling US dollars," one executive told Reuters, referring to the yuan by it's official name.imposed by a G7-led coalition. The cap makes it extremely complicated for banks to process payments in the greenback, the source told Reuters.
While Reuters did not specify the proportion of Russian imports that China is paying for in the yuan, the total settlements on the Cross-Border Interbank Payment System — China's version of the inter-bank messaging system SWIFT — jumped 22% year-on-year to the equivalent of $14 trillion in 2022, Reuters reported citing Chinese central bank data.
To contextualize this, China imported $88 billion worth of major commodities including crude oil and fuel oil from Russia in 2022 — up 52% in value from 2021. And much of this trade has been settled using the yuan amid sanctions and boycotts against Moscow — which includeChina and Russia have been moving away from the dollar for years.But their adoption started to gain pace only after the Ukraine war started.
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