Russian President Vladimir Putin has endorsed the yuan as the currency of choice during the visit of Chinese President Xi Jinping to Moscow couple of days ago.
The two prominent leaders inked 14 economic agreements on March 21, including scientific cooperation and joint production of television programs. This move is aimed at counterbalance the US dollar’s worldwide dominance.
In a joint statement announcing the agreements, China and Russia said their alliance was not “confrontational in nature and…not directed against third countries.” The leaders also called for an “acceleration of the process of establishing a multipolar world order.”
Putin specifically mentioned the Chinese currency in the context of Russian investments in the developing world.
“We are in favor of using the Chinese yuan for settlements between Russia and the countries of Asia, Africa, and Latin America. I am confident that these forms of settlement in yuan will develop between Russian partners and their counterparts in third countries,” Putin said in a statement.
A spokesperson for the Russian Ministry of Finance said the yuan is “taking an increasingly important role” in its sovereign-wealth fund, which doubled the share of yuan it can hold to 60% in December.
The Russian Finance Ministry started selling yuan in January to plug its widening budget deficit.
Xi Jinping’s efforts to promote the yuan are part of the plan to become more involved in global economic affairs.
Last week, Xi negotiated a peace treaty between Saudi Arabia and Iran, with the goal of helping end a proxy war in Yemen.