Putin on Dedollarization: 80% of Russia-China Trade in Rubles and Yuan

Putin Emphasizes Economic Cooperation and Dedollarization at SCO Summit

Russian President Vladimir Putin participated in the Shanghai Cooperation Organisation (SCO) Heads of State Council meeting via videoconference on July 4. The event was chaired by Indian Prime Minister Narendra Modi.

Putin emphasized the importance of economic cooperation and the SCO’s role in maintaining peace. He highlighted progress in economic integration, noting a 37% increase in Russia’s trade with SCO member states to a record $263 billion in 2022, and a further 35% increase from January to April 2023. According to the Kremlin’s translation, Putin stated:

We are making wider use of national currencies for mutual settlements. In particular, over 80% of commercial transactions between Russia and the People’s Republic of China are made in rubles and yuan.

Established in 2001, the Shanghai Cooperation Organisation is a political, economic, and security alliance. The SCO currently has nine full members: India, Iran, Kazakhstan, China, Kyrgyzstan, Russia, Pakistan, Tajikistan, and Uzbekistan. Three countries hold observer status with the SCO: Afghanistan, Belarus, and Mongolia. Fourteen countries have dialogue partner status: Azerbaijan, Armenia, Bahrain, Cambodia, Egypt, Kuwait, Maldives, Myanmar, Nepal, Qatar, Saudi Arabia, Sri Lanka, Türkiye, and the United Arab Emirates (UAE).

The SCO aims to foster economic cooperation, regional security, and cultural exchange among member states. Economic integration within the SCO has gained momentum, particularly with initiatives to use national currencies for trade, reducing dependence on the U.S. dollar. This shift aligns with broader global trends of dedollarization, where countries seek to diversify their foreign exchange reserves and reduce exposure to the U.S. financial system.

Noting that “the share of the Russian national currency in export transactions with all the SCO countries exceeded 40% in 2022,” Putin emphasized: “Russia has been very active in implementing the SCO roadmap for the transition to national currencies in mutual trade, endorsed at the previous summit in Samarkand, Uzbekistan.” The Russian leader stressed:

It is important to continue this work, to take coordinated measures to remove regulatory barriers, to establish the necessary payment infrastructure and to create an independent financial system.

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