Bolivia has become the latest country in South America to regularly use alternative currencies in cross-border trade, instead of the US dollar, in a growing challenge to the dominance of the currency for international financial transactions in the region.

Bolivian Economy Minister Marcelo Montenegro said on Thursday that the nation conducted financial operations amounting to 278 million Chinese yuan ($38.7 million) between May and July of the current year. That accounts for 10% of its foreign trade during that period.

“Banana, zinc, and wood manufacturing exporters are conducting transactions in yuan, as well as importers of vehicles and capital goods,” Montenegro said during a press conference in La Paz, adding that the share of alternative currencies is expected to increase over time.

Importers and exporters have been able to trade in yuan since February, and the Russian ruble since March via Banco Union, a Bolivian state-owned lender, bank officials said, as cited by Reuters.

The transactions between Banco Union and Russia’s Gazprombank facilitate “the work of Russian companies in the market” in spite of economic penalties imposed on Moscow by the West since 2022, according to Russian Ambassador to Bolivia Mikhail Ledenev, as quoted by the agency.

Bolivia has followed other states in the region, most notably Brazil and Argentina, which have recently turned to alternative currencies in their foreign trade. Bolivia has experienced severe dollar shortages, partially triggered by a drop in the production of natural gas, which is a key export item for the country. The shortages have had a significant impact on the nation’s economy since February.

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