Economy 09-11-2018

Why Russia and China want to do their bilateral trade in their national currencies

According to the president of the Russian bank Vnesheconombank, Moscow and Beijing will sign a document about it "as soon as possible."

Russia and China intend to sign before the end of 2018 an agreement to use their national currencies in bilateral trade. According to affirmed this Wednesday the president of the Russian bank Vnesheconombank (VEB, by its abbreviations in Russian) Ígor Shuválov, mentioned by TASS , the project of the document on the matter already has been presented / displayed to the leaders of both countries.

"Russia has its own channel, China has its channel, we just have to agree on how we are going to collaborate using these channels and other ways to make the payments," the economist explained. According to his statements, the principle of the operation of the new mode of payments is described in detail in the document and "would be very good" if signed " as soon as possible ", specifically before the end of this year.

Shuvalov said the Chinese authorities have also shown great interest in the initiative. "The Chinese side is perhaps more interested" in the agreement with Russia, reiterated the head of the VEB. The banker added that "in the coming weeks consultations will be held" regarding the future agreement.

In this context, the Russian Deputy Prime Minister and Finance Minister, Antón Siluánov, emphasized that the de-dollarization plan "will facilitate for our business [between Russia and China] the opportunity to make payments and financial transactions".

For his part, Russian Deputy Prime Minister Sergei Prijodko stressed that the elimination of the US currency from trade between Russia and China is " a current task ." "Due to the US sanctions, new payment mechanisms are needed" between both nations, he reiterated. The use of national currencies "will significantly reduce the risks of sanctions and the dependence on bilateral trade of the US dollar," as well as help "avoid exchange rate fluctuations and money transfer rates," the politician added. "The measures will increase the status of national currencies," Prijodko concluded.

On October 9, the President of Russia,Vladimir Putin , confirmed in the framework of the Eastern Economic Forum, which was held in the Russian city of Vladivostok (Far East) that "the most active use of national currencies in bilateral trade "" will increase the stability "of banking operations in exports and imports" against the risks that world markets face ".


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