The international financial system needs to balance which is why there is no place for a dominant currency, Russian Prime Minister Dmitry Medvedev said at a news conference on Wednesday.
“The balanced system of financial relations should be based on the use of various reserve currencies, various forms of settlement. There should be no domination of any one currency,” said Medvedev, speaking at the regular Russia and China heads of government meeting.
Medvedev said that no matter how strong the American economy, it also faces problems from time to time. “As a result, the entire financial world is shaken. A more balanced international financial system is better for everyone,” the prime minister said.
According to Medvedev, Russia is pleased with the growing role of the Chinese yuan in global settlements, as it represents one of the world’s largest economies.
In May, Russia and China established an investment fund worth 68 billion yuan ($10 billion).The countries also plan to extend the bilateral currency swap agreement for another three years. In 2014, Russia and China agreed on a 3-year ruble-yuan currency swap deal of up to $25 billion.
China has been pushing for a greater use of the yuan in oil settlements. As the country has become the largest oil importer overtaking the United States, it can now dictate rules, experts note.
The chief economist and managing director at High Frequency Economics, Carl Weinberg, has predicted that “Chinese [oil] demand will dwarf US demand,” and Beijing is likely to “compel” Saudi Arabia to sell crude oil in yuan, a move to be followed by others.