2023-07-03 11:43:00
The Chinese yuan plays an increasingly important role in the Russian financial system
New Delhi – Archyde.com
Posted on: July 03, 2023: 03:43 PM GST Last updated: July 03, 2023: 03:56 PM GST
Indian refiners have started paying for some oil imports from Russia in Chinese yuan, informed sources said, as Western sanctions force Moscow and its clients to find alternatives to dollars to settle payments.
Western sanctions following Russia’s invasion of Ukraine shifted global trade flows to Moscow’s biggest export, oil, with India emerging as the largest buyer of Russian seaborne oil even as it searches for a way to pay the price under shifting sanctions.
The US dollar has long been the main global oil currency, including for India’s purchases, but the Chinese yuan is now playing an increasingly important role in Russia’s financial system following Moscow was barred from transacting through dollar and euro financial networks under international sanctions.
China also switched to the yuan for most of its energy imports from Russia, China’s biggest crude supplier, in the first quarter of this year.
An Indian government source said: “Some refineries pay in other currencies such as the yuan if the banks are unwilling to settle the trade in dollars.”
In June, the Indian Oil Corporation, the country’s largest buyer of Russian crude, became the first state refiner to pay for some Russian purchases in yuan, three sources familiar with the matter said.
Two other sources said at least two of India’s three private refineries also pay for some Russian imports in yuan.
All sources declined to reveal their names due to the sensitivity of the matter.
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