Russian President Vladimir Putin and Chinese President Xi Jinping.
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Russia is stepping up sales of Chinese yuan as energy revenues have fallen.
The Kremlin is further drawing down its $45 billion stockpile of renminbi.
Moscow saw a decline of 54% in energy revenue in January from December.
Russia is increasing sales of its foreign exchange reserves to plug a hole in its budget as energy revenues crash.
The finance ministry said Friday that it will sell 160.2 billion rubles ($2.3 billion) worth of foreign currency from February 7 to March 6. That’s nearly triple the 54.5 billion rubles worth of forex sold last month.
Since Russia’s reserves of Western currencies were frozen after its invasion of Ukraine last year, Moscow has primarily relied on its $45 billion stockpile of Chinese yuan sitting in its wealth fund to cover budget deficits.
And those gaps widened sharply after January energy revenue came in at $6 billion, which was down 54% from the prior month and 46% from a year ago.
The steep fall in revenue comes amid tighter sanctions on its oil exports as well as tougher comparison from a windfall tax paid by state-run energy giant Gazprom in 2022.
Meanwhile, Russia’s wealth fund is on pace to lose 6.5% of its yuan holdings from January to February of this year, the report said, which is equivalent to a 310 billion yuan.
Selling its yuan reserves will help Russia cover its losses for the next three years, according to a recent analysis from Bloomberg Economics. Citigroup estimates that it will cover losses for a slightly shorter period of about two and a half years.
How long the reserves will last will depend on the fluctuations of the price of Russian oil, which is one of Russia’s largest commodity exports. Its flagship Urals crude blend is trading around a third of what it was last year.