Russia and China start to use own currencies in exchange trade

[A.V.]

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/

 

[ajtr]

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

 

[AkhandBharat]

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.

 

[LETHALFORCE]

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.

 

[ajtr]

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.

 

[LETHALFORCE]

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.

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.

 

[badguy2000]

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

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.

 

[ajtr]

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.

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

 

[Zaki]

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

 

[ajtr]

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

 

[badguy2000]

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

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.

 

[ajtr]

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.

Impact will be both ways both on usa and china then.

 

[Raj Malhotra]

the easy acceptance of indian courrency in middle east even by their national banks show indian rupee is slowly and steadily becoming convertible

 

[amoy]

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

To realize the Renminbi (RMB)-dominated transaction and trade settlement has become an ever-stronger request in Thailand and the ASEAN area as the ASEAN-China Free Trade Area will fully come into force on January 1, 2010, said Wichai Kiatrengsuk, vice president of the Bangkok Bank and manager of the bank's Chinese Relations Department.

"As the robust development of Sino-Thai trade and investment, there has been an increasing stronger request among our clients that the trade be directly settled between the Chinese currency and Thai baht, without the involvement of U.S. dollars. Many clients from other Southeast Asian countries have made the similar appeal -- the RMB's direct settlement with their local currencies," said Wichai after a ceremony by the Bangkok Bank to mark the launch of Thailand's first credit card that adopts the standard of China Union Pay (CUP), the largest credit card provider in China.

The "Bangkok Bank China UnionPay" credit card itself, said the vice president, is an example that allows direct settlement between RMB and baht.

"Because when a client uses this card in the Chinese mainland, he is consuming with RMB, but when he repays the money back in Thailand, he is using Thai baht. Of course this is a special case only when using this credit card. But what is undeniable is that the tie between the two currencies is getting stronger and stronger," said Wichai, who is in charge of Chinese business of the Bangkok Bank, the largest commercial bank in Thailand.

His remarks came after the Bank of China Hong Kong said earlier this month that it has signed the "clearing and settlement agreement of Yuan-denominated trade transactions" with a number of commercial banks in the ASEAN and other relevant areas.

After signing the agreement, the Bank Central Asia, Bangkok branch of the Bank of China, Manila Branch of the Bank of China, Jakarta Branch of the Bank of China, Singapore branch of the Bank of China, Malaysian branch of the Bank of China will become participating banks of Renminbi business in the ASEAN region.

Actually with little fanfare last year, Beijing had embarked on the first step on a long road toward making the yuan one of the world's top currencies, allowing Chinese exporters and importers to start settling trade in yuan rather than dollars.

Wichai believes that after the launching of the ASEAN-China FTA in January, how to push forward the RMB-dominated trade settlement would become an immediate issue in this area.

The FTA, the largest one in the world that will cover 1.9 billion people and 6-trillion-U.S-dollar GDP in this region, pledges to phase out most tariffs among ASEAN countries and between the ASEAN and China by January 1, 2010.

Also in a related development that coincides with the FTA's launch, the Bangkok Bank recently has received a license from the Chinese government to operate the Bangkok Bank (China), a locally incorporated bank in China.

To open on December 28 in Shanghai, this bank will be one of the about 30 fully-foreign-owned banks in the China mainland, said Wichai, adding that this indicates Bangkok Bank's resolution to get more involved in Sino-Thai cooperation in financial sectors under the larger framework of ASEAN-China FTA.

He said as a regional financial institution, the Bangkok Bank definitely benefits from the two huge economies of China and ASEAN's free trade and investment. "The cooperation and integration of China, with a population of more than 1.3 billion, and the ASEAN, with a population of about 6,000 to 7,000 million, is a huge opportunity for banks."

"We are glad to see the FTA is finally to be realized in early next year, for which every party has been working very hard for a long time," Wichai said.

And the Bangkok Bank, he said, hopes to play an important role in the development of this free trade area. "The development of our business largely depends on clients' demand. We set a branch or sub-company not out of our own will, but following the business outreach of our clients. And I believe the Bangkok Bank can get more benefit as the bilateral trade and investment between the ASEAN and China grows."

 

[anoop_mig25]

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

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