Russia and China start to use own currencies in exchange trade

Discussion in 'China' started by A.V., May 2, 2010.

  1. A.V.

    A.V. New Member

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    Russia and China agreed to use own currencies in exchange deals. In frames of this agreement China will allow rouble to be traded in country. This will be one more step to full convertable China currency.

    http://lenta.ru/news/2010/04/30/agree/
     
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  3. ajtr

    ajtr Veteran Member Veteran Member

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    hope india -china can trade in their respective currencies too.it will be the biggest blow to west.
     
  4. AkhandBharat

    AkhandBharat Regular Member

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    For the last two decades, US had been riding on the strong dollar to compete against and utilize other nations for cheap labor and increase its GDP. If the BRIC nations start using their own currency for bilateral trade, it would expose the US and Europe and push them towards the brink of bankrupcy they are riding in.
     
  5. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    India and Russia also doing similar

    http://www.2point6billion.com/news/...lar-and-return-to-rupeerouble-trade-2717.html

    Russia, India to Ditch U.S. Dollar and Return to Rupee/Ruble Trade


    Oct. 26 – India and Russia are considering returning to a rupee-ruble trade arrangement to end the dependency on the dollar and step up economic interactions, which are set to triple in bilateral trade within five years.

    Indo-Russian trade was based on rupee-ruble transactions during the Soviet era, which led to India emerging as the biggest trade partner of the former USSR in the developing world. Bilateral trade between India and the former USSR was US$5 billion in 1991.

    Current bilateral trade is around US$7 billion, although this is in what is now a smaller market. Nonetheless, the feeling is that U.S. dollar-denominated bilateral trade has not assisted with any major developments in cross-border economics and is now becoming an unnecessary liability.

    The Bank of Russia, the country’s central bank stated the central banks for bother countries had “agreed to hold consultations to study the possibility of using national currencies transactions in foreign economic operations between Russia and India.” According to the Bank of Russia, both sides discussed the issue at the 15th session of Indo-Russian working group on banking and financial matters in Hyderabad earlier this month.

    Russia, which has made the ruble a fully-convertible currency in July 2008, is keen to add it into the basket of global reserve currencies on the backdrop of sliding value of the U.S. dollar.

    Earlier this week, the 15th session of Indo-Russian Inter-Governmental Commission (IRIGC), co-chaired by External Affairs Minister S M Krishna and Russian Vice-premier Sergei Sobyanin, said the commerce secretary-level Joint Task Force (JTF) should monitor implementation of its recommendations to promote bilateral trade, investment and economic cooperation.

    New Delhi and Moscow have set a target to increase bilateral trade to US$20 billion by 2015.
     
  6. ajtr

    ajtr Veteran Member Veteran Member

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    BRIC countries must float their unique international currency on the lines of euro.But then its not possible.coz china's economy is intertwined with USA's and china is sitting on trillions of dollars and usa can any day make those trillions dollars into trash papers.
     
  7. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    AJ what would prevent China from doing trade in dollars they have exchanged for the domestic currency for the country they are trading with? This could be a good way for China to reduce their dollar holdings, but even that maybe too slow for the dollar and debt bomb that makes up their economy.
     
  8. badguy2000

    badguy2000 Respected Member Senior Member

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    either sino-russia trade or sino-hindi trade is too limited that it can not have deep impact on the dominance of dollars.

    only when sino-EU trade or sino-Japan trade were to abandon dollars, the dominance of dollars would end

    as we know, either sino-Russia or sino-india trade is less 60 billion USD every year.

    However, either sino-EU trade or sino-Japan trade is 300 billion+ USD every year.
     
  9. ajtr

    ajtr Veteran Member Veteran Member

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    thats what i said in my 2nd post that us-sino economy is much entwined then whole BRIC countries economies.
     
  10. Zaki

    Zaki Regular Member

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    Well China is doing this with many countries. They are already using its currency for several countries and in the verge of signing an agreement with Pakistan also :)

    I guess similar agreement was signed with Brazil and few other countries in the past
     
  11. ajtr

    ajtr Veteran Member Veteran Member

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    ^^but these are much smaller countries in terms of economy as compared to usa as badguy said 2 post before.
     
  12. badguy2000

    badguy2000 Respected Member Senior Member

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    yes. Rome was not built in one day.
    Undermining the dominance of dollar can not be finished in one day. it is a long-term job for China.

    China now does the job quite well and quietly.

    as we know, before volcanos erupt perhaps for only several days,rock-magmas always have been accumulated quietly for thousands of years underground.

    One day, the dominance of dollar will collapse suddenly as volcanoes erupt. what China now does is to prepare enough rock-magmas quietly.
     
  13. ajtr

    ajtr Veteran Member Veteran Member

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    Impact will be both ways both on usa and china then.
     
  14. Raj Malhotra

    Raj Malhotra Regular Member

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    the easy acceptance of indian courrency in middle east even by their national banks show indian rupee is slowly and steadily becoming convertible
     
    LETHALFORCE likes this.
  15. amoy

    amoy Senior Member Senior Member

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    I've travelled to Myanmar, Viet Nam, and Thailand. Local business men actually prefer and even hoard CNY (RMB) with a speculation on appreciation while their own currency is so turbulent in times (especially Myanmar banknotes have lost its credibility)

    At least CNY is heading towards a regional hard currency role with phase-in of FTA with ASEAN. But it's impossible to be in pararell with USD for a long long time.


    RMB-dominated transaction a trend in ASEAN-China FTA construction 16:46, December 28, 2009
     
    Last edited: May 2, 2010
  16. anoop_mig25

    anoop_mig25 Senior Member Senior Member

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    one question is pak-china trade is bigger than indo-china.plz exclude gov-gov deals .it should be stricly private deals . if yes then congrts to pak-chinese memebers here .and if no then it shows bias of china towards pakistan as said by badguy2000 the trade should be more than that of sino-EU trade or sino-Japan then only there is point of shifting the currency. by the way how exchange rate is calculated in such scenes
     

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