Western sanctions against Russia over its invasion of Ukraine have given a boost to China's efforts to internationalise its currency, with a dramatic increase in its use in commodity and energy trade with Russia

Last July, the RBI introduced a new mechanism to settle international trade in rupees, aiming to promote exports and facilitate imports

China has set up a yuan reserve pool along with Indonesia, Malaysia, Hong Kong, Singapore and Chile at the Bank for International Settlements

Calls for reduced reliance on the dollar system and boosting the yuan to become a robust, globally-traded reserve currency come in the wake of deteriorating relations with the West

China's yuan has seen its best week in about 18 months, extending gains on Monday against the dollar, as Shanghai lifted more Covid restrictions

IMF raised dollar weighting to 43.38% from 41.73% and yuan's to 12.28% from 10.92%. The euro's weighting declined to 29.31% from 30.93%, the yen's fell to 7.59% from 8.33% and the British pound fell to 7.44% from 8.09%

Nomura said yuan depreciation could also add modest inflationary pressures, as China is the world’s largest importer of energy and agricultural products

The Chinese yuan hit an 18-month low in Monday morning trade as concern about its zero-Covid policy and economic slowdown weakened the currency

Overseas investors extended their selling of Chinese shares into April on mounting worries about prolonged Covid-19 lockdowns and Russia's invasion of Ukraine

The yuan has fallen 4.6% this month to 6.63 yuan per dollar in the biggest percentage fall since the currency was released from its peg to the greenback in 2005

Sentiment was undermined by fears strict lockdown measures will spread to Beijing, after the capital required everyone living or working in Chaoyang district to take Covid tests this week

But falls were limited by China surprisingly keeping its benchmark lending rates steady for the third straight month at its April fixing