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China, Russia aim to trade in yuan, rouble -media

Published 10/13/2009, 04:49 AM
Updated 10/13/2009, 04:51 AM

BEIJING, Oct 13 (Reuters) - China and Russia said on Tuesday that they would like to expand the use of their national currencies, the yuan and the rouble, in bilateral trade, according to media reports.

The goal of denominating trade in their own currencies in order to cut reliance on the U.S. dollar and the euro was first voiced by Russian and Chinese leaders in June at a meeting in Moscow.

China has started trials for settling trade in yuan with a series of neighbours, including Hong Kong, although not Russia. The trials have made little progress so far, in part because the yuan lacks full convertibility, and the vast majority of Chinese trade flows are still denominated in dollars.

China and Russia would like to expand the roles of the yuan and the rouble in trade, especially in their border regions, and may sign a bilateral monetary agreement, Chinese Vice-Premier Zhang Dejiang was quoted as saying by Caihua, a Hong Kong-based news agency.

At a meeting in June, Russian President Dmitry Medvedev and Chinese President Hu Jintao said it was "essential" to put conditions in place for trade to be settled in yuan and roubles.

China and Russia have advocated the creation of a new super-sovereign currency to replace the dollar as the main global reserve currency, but have acknowledged that this would be a long-term project. Both would lose a lot from any steep drop in the U.S. currency because much of their foreign exchange reserves are invested in dollar-denominated assets.

Russian Prime Minister Vladimir Putin is visiting Beijing and his meetings have focused on shoring up economic relations, ushering in trade deals said to be worth $3.5 billion. [ID:nPEK311780] (Reporting by Simon Rabinovitch; Editing by Chris Lewis)

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