Russia and China are planning a transition to making trade settlements in rubles and yuan, according to a statement Russian President Vladimir Putin made at the recent Asia-Pacific Economic Cooperation (APEC) summit in Beijing. The move is intended to reduce the U.S. dollar’s influence on the global energy market. “In the long-term, of course, settlements in rubles and yuan are very promising,” said Putin. “This will mean, if we transition to such a large-scale operation, that the influence of the dollar, say, in global energy, will objectively decline.”
Shortly after Putin made the announcement, Russia’s largest bank — state retail banking giant Sberbank — began financing letters of credit in Chinese yuan and performed the first transactions in yuan with one of Russia’s largest companies.
The decision is just the latest move in increased cooperation between Russia and China. While Russia has long talked about the possibility of a pivot toward Asia, the country’s increasing isolation from Western countries has proved an important catalyst in the process. Analysts say that both Russia and China will profit from closer ties, and the currency agreement is one indication.
