July 6, 2015, 10:55 am
China is promoting the use of its currency as an alternative to the dollar in global trade and finance [Xinhua]
Russia and China on Monday pledged to settle more bilateral trade in ruble and yuan with central banks of the two countries set to sign a financial agreement, reducing the role of the dollar in international trade.
The 6th China-Russia Finance Ministers dialogue is being held in Moscow.
Russian Finance Minister Anton Siluanov and his Chinese counterpart Lou Jiwei discussed bilateral cooperation as well as the upcoming BRICS Summit on Monday.
“We have actually reached a final stage of preparing this document. I believe we’ll be able to sign it in the coming days. The memorandum deals with such issues as making settlements in national currencies, stimulating access to internal markets and so on,” said Siluanov.
Chinese Finance Minister Lou Jiwei said the BRICS Bank and the Asian Infrastructure Investment Bank will aid in injecting new vigor to Russian-Chinese bilateral ties.
The third biggest shareholder of the new China-led Asian Infrastructure Investment Bank, Russia, last week approved the articles of association of the new lender. Russia owns 65,362 shares of the bank.
“Russia and China are the founding countries of the AIIB and are also investors of the BRICS Development Bank. We can use these two mechanisms, two structures for promoting Russian-Chinese bilateral and surely multilateral cooperation [with the participation of Russia and China],” said Lou in Moscow on Monday.
US and European governments have slapped sanctions on Russia for its alleged backing of separatist rebels in Ukraine.
Russia denies the allegations.
Washington and Brussels have excluded Russia’s state banks and top energy firms from capital markets.
Meanwhile, overtaking the Canadian dollar and the Australian dollar, China’s yuan has become the world’s fifth most widely used payments currency, according to the Society for Worldwide Interbank Financial Telecommunication (SWIFT).
The value of cross-border deals settled in the Chinese currency, yuan, more than doubled in 2014, shows new data from SWIFT in January this year.
China’s policy makers are seeking to boost the currency’s convertibility and global use.
The yuan reached a record high share of 2.17 per cent in global payments by value in 2014.
The U.S. dollar, euro and British pound remain the top three world payment currencies.
The yuan surpassed the euro in 2013 to become the second-most used currency in global trade finance.
The Chinese currency is already traded directly against the US dollar, the euro, the Japanese yen, the British pound, the Aussie and New Zealand dollars, Russia’s rouble, the Singapore dollar and Malaysia’s ringgit.