NEW DELHI: Indian refiners have settled some payments for Russian oil imports in Chinese yuan, but the U.S. dollar remains the dominant currency for such payments, a senior government official said.
India became one of the biggest buyers of Russian crude after Western sanctions imposed on Moscow over the Ukraine war dragged down prices, but the South Asian country has been on the lookout for alternatives to the dollar for settling payments.
Reuters reported earlier this month that Indian refiners have started turning to the yuan for some payments for Russian oil.
“Use of yuan for payment by India will remain limited, given India doesn’t accumulate much yuan as export to China is low,” the official, who did not want to be named, told Reuters.
The official also said the Reserve Bank of India will release guidance for banks in two to three days to resolve some teething issues on the rupee trade mechanism.
“The issue with rupee trade is that it can only work as a barter currency,” the official said.
Due to defence trade, Russia has accumulated a lot of rupee reserves, he added. In May, Russian Foreign Minister Sergei Lavrov said talks were underway with India to exchange billions of rupees that have accumulated in Indian banks for other currencies.
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