China and Russia to use their own currencies for trading
November 29, 2010 Category Foreign trade, Weekly
Following talks between Russian Prime Minister Vladimir Putin and his Chinese counterpart Wen Jiabao in Moscow, Russia will start allowing trading in yuan on Moscow’s currency exchange next month, while China has allowed the yuan to start trading against the Russian ruble in its interbank market. Until now, the two nations have mostly traded in U.S. dollars. China has encouraged the yuan’s use for cross-border trade to reduce its reliance on the dollar. Traders can also buy and sell the yuan against the Malaysian ringgit, the U.S. dollar, the euro, the yen, the Hong Kong dollar and the British pound. The value of international trade transactions settled in the Chinese currency totaled CNY126.5 billion in the third quarter, 160% more than in the three months through June, the People’s Bank of China (PBOC) reported. China first approved yuan use for trade settlement in July 2009. Following talks in St Petersburg, Russia’s state-controlled Atomstroiexport signed a contract to build another two reactors at China’s Tianwan nuclear power plant in Jiangsu province. During Wen’s visit, Russia and China signed a total of 11 agreements, ranging from oil supplies and refining to intellectual property and border issues. But Russia and China are unlikely to agree on the price of Russian gas supplies to China before the middle of next year, Russian Deputy Prime Minister Igor Sechin said. Under a deal signed between Russia’s Gazprom and China National Petroleum Corp (CNPC) in September, Gazprom will sell 30 billion cubic meters of gas per year to China from 2015, the Shanghai Daily reports.
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