China has recently revived talks with Saudi Arabia on settling some oil trades in renminbi in a move that many market players see as a first step towards gradually shifting the global oil trade to the renminbi from the US dollar, creating the ‘petro-yuan’.
Meanwhile, the Russo-Ukrainian crisis has raised the possibility of Russia trading oil with China using the renminbi instead of USD.
If Saudi Arabia and Russia were to work with China, the amount of renminbi-denominated oil trades could rise sharply and transactions could go through China’s payments system, the Cross-border Interbank Payments System (CIPS), at the expense of the dollar and the SWIFT system. READ MORE
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