Russia, China Prepare to Dump Dollar, Agree to Bilateral Trade in National Currencies
The comments below are an edited and abridged synopsis of an article by Tyler Durden
One month after conducting joint military exercises, Russia and China are set to sign an agreement that would boost the use of their national currencies in bilateral and international trade in an attempt to move away from the current dollar-denominated financial system.
The Kremlin has released a draft decree outlining “settlements and payments for goods, service and direct investments between economic entities of the Russian Federation and the People’s Republic of China [that] are made in accordance with the international practice and the legislation of the sides’ states with the use of foreign currency, the Russian currency (rubles) and the Chinese currency (yuan).”
According to the draft, Moscow and Beijing will cooperate to develop a national payments system, along with cross-border payments in national and other currencies.
Last November, Russian Prime Minister Dmitry Medvedev said that discussions were under way to allow the use of China’s UnionPay credit card in Russia, and Russia’s Mir card in China.
Chinese President Xi Jinping touted a new level of relations with Russia during his recent 3-day visit. “Step by step, we’ve been able to bring our relations to the highest level in history,” said Xi.
Russian President Vladimir Putin said that ties between the two countries are at an unprecedented level.
President Xi will sign about 30 documents with Putin after the talks focused on trade, investment and energy. Bilateral trade increased last year by about a quarter to a record $108 billion. The countries’ first natural gas pipeline is due to open later this year, and China is investing in Russia’s Yamal Arctic LNG project.