Russia reveals scale of trade in national currencies

Most transactions with close partners are carried out in rubles, President Putin has told an audience at SPIEF

The Russian government is preparing new mechanisms for cross-border settlements to meet new demand for non-dollar denominated trade, President Vladimir Putin said on Friday at the St. Petersburg International Economic Forum.

Russia and its main trading partners such as China and India started to switch to national currencies in mutual trade after Moscow was slapped with sanctions that effectively cut it off from the Western financial system.

President Putin described the progress towards the adoption of national currencies such as the Russian ruble and the Chinese yuan in trade as “noticeable.”

“Today about 90% of settlements with the countries of the Eurasian Economic Union are made in rubles. More than 80% of settlements with China are made in rubles and yuan," the president told the forum.

The Eurasian Economic Union is a Russian-led alliance that currently brings together five post-Soviet countries, namely Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia.

READ MORE: How Russia sanctions sparked global revolt against US dollar

Bilateral trade between Russia and China exceeded $93 billion between January and May, a 40.7% increase compared to the same period last year, according to data from China’s General Administration of Customs. Beijing's exports to Moscow also grew by over 75%. The figures represent the biggest rise since the start of Russia’s military operation in Ukraine, signaling that Russia is becoming China’s fastest-growing trade partner globally.

President Putin has also called for an increase in inward investment, declaring that it needs to jump fivefold, or up to roughly $120 billion, by 2030.

Find more stories on economy and finance in TROIB business