The media informed that the country will use the currency to finance imports from China and thus overcome its dollar shortage.

This decision gives greater strength to the yuan or renminbi (RMB) and contributes to its growing relevance in cross-border transactions, in reaction to the proliferation of U.S. restrictions on the use of its currency.

Earlier this month China’s central bank confirmed the signing of a memorandum of cooperation with its Brazilian counterpart to use the RMB for transactions by companies and financial institutions in both countries, as well as bilateral trade and investment.

Last year the Asian giant signed a similar document with Laos, and Russia’s Gazprom oil company and the state-owned China National Petroleum Corporation also signed another to pay for Russian gas shipments here in yuan and rubles.

An official statement then specified that the payment mechanism is ‘mutually beneficial, convenient, reliable and practical’, as it will facilitate operations and encourage more companies to take a similar step.

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