Russia is using China's yuan to settle 25% of its trade with the rest of the world, report says

• Russia has embraced the yuan since its invasion of Ukraine triggered western sanctions.
• The renminbi is now used to settle 75% of its trade with China and 25% of its transactions with other countries, according to official data.

Russia has been stoking the de-dollarization movement by settling more contracts with its trading partners using the Chinese yuan – and the currency now accounts for a massive share of its imports and exports.

The renminbi was used to pay for for 75% of Russia's trade with China and 25% of its dealings with other countries over the first half of 2023, Moscow-based outlet RBC reported Thursday, citing data from the Ministry of Economic Development.

Western countries froze over half Russia's foreign reserves after Vladimir Putin invaded Ukraine in February 2022.

That's forced the Kremlin to move away from what it calls "toxic currencies" – and the yuan quickly emerged as one of the main beneficiaries, with its share of Russian import settlements rising from 4% to 23% last year, per Reuters.

Those toxic currencies now account for just 28% of all Russia's export revenue and 31% of its import revenue, according to RBC's report.

Before war broke out in Ukraine, they were used to settle 87% of export payments and 67% of import payments.

Russia's embrace of the renminbi comes within the wider context of a global de-dollarization drive, with Brazil, China, India, South Africa, and several other countries all trying to chip away at the buck's dominance in a bid to diminish Washington's economic power.

China asked Middle Eastern suppliers to accept the yuan rather than the dollar in oil trades in December, while since March 2022 Russia has forbidden "unfriendly" countries from settling natural gas contracts in any currency other than its own ruble.

Despite that push the yuan still accounted for just 2.6% of all foreign reserves as of the first quarter – while the dollar held a mammoth 59% share, according to data from the International Monetary Fund.