Moscow and Beijing have inked an intergovernmental agreement to switch to national currencies in bilateral trade and boost cross-currency settlements up to 50 percent as they ramp up efforts to move away from the US dollar.

The document was signed by Russian Finance Minister Anton Siluanov and the head of the People’s Bank of China, Yi Gang, earlier in June, Izvestia reports.

Moscow and Beijing are currently developing new mechanisms of cross-border payments between Russian and Chinese businesses, the newspaper said, citing a letter from Deputy Finance Minister Sergey Storchak to Anatoly Aksakov, the head of the financial market committee of the State Duma (lower chamber of Russia’s parliament). The two sides may settle payment gateways between their domestic alternatives to the traditional SWIFT system, Russia’s System for Transfer of Financial Messages (SPFS) and China’s Cross-Border Inter-Bank Payments System (CIPS).

The two countries will have to develop ruble and yuan financial instruments to boost cross-currency trade and mitigate risks of exchange rate fluctuations, according to Aksakov. He added that in the coming years, the share of settlements in national currencies between Russia and China could increase fivefold – from 10 to 50 percent.

The mechanism of payments in national currencies is set to be developed by next year. At first, major companies with state participation from sectors such as energy and agriculture will switch to it. The yuan-ruble payments will also be made on existing contracts which stipulate settlement in dollars.

China is Russia’s largest trading partner, with bilateral trade exceeding $107 billion. The two sides are also planning to double the current trade volume in the next few years.

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