A Russian newspaper has revealed that senior authorities from Russia and China have signed an agreement to ditch US dollar and other major international currencies in mutual trade and instead use their own national currencies.

The Izvestiya newspaper said on Friday that the agreement had been signed earlier in June between Russian Finance Minister Anton Siluanov and Chinese People's Bank Governor Yi Gang.

The report said the agreement was a first practical step for the two countries to switch to national currencies in mutual payments.

Chairman of the Russian lower house’s Committee on Financial Market, Anatoly Aksakov, told Izvestiya that Moscow and Beijing were already developing new mechanisms for payments in Russia’s ruble and China’s yuan.

Aksakov said the two sides were also moving toward the creation of a market of ruble and yuan financial instruments so that risks associated with the exchange rate fluctuations in bilateral trade could be managed.

‘BRICS should use national currencies’

The news of the agreement broke as Russian President Vladimir Putin renewed his call for inter-governmental mechanisms to settle transactions in national currencies.

While attending the G20 summit of powerful economies in Japan on Friday, Putin urged five major emerging economic powers Brazil, Russia, India, China and South Africa, known as BRICS, to accelerate their efforts to develop a system that could replace the current form of payments for trade which is dominated by the US dollar and other currencies.

“Cooperation in terms of developing the use of our national currencies in international settlements seems very promising,” Putin said while in Osaka at a meeting of BRICS.

Countries like Iran and Venezuela, who have suffered like Russia as a result of US sanctions over the past years, have also called the use of national currencies in global trade.

Iranian Deputy Foreign Minister Abbas Araqchi said on Thursday that there was a need for the international community to “confront this wrongful habit of the US to use the power of dollar as a weapon against independent countries”.

Iranian Foreign Minister Mohammad Javad Zarif also suggested earlier this month that America’s hegemony would collapse if countries around the world were to ditch the US dollar as the basis for their international trade.

“America’s power rests on the dollar; a great part of America’s economic power will go away if countries eliminate the dollar from their economic systems,” said Zarif.