"It is believed that the yuan-ruble settlement is the prerequisite for further development of economic cooperation between China and Russia"
MOSCOW, May 14 (Xinhua) -- The yuan-ruble settlement would help further deepen financial cooperation between China and Russia, said Zhao Lianjie, director of the Bank of China's Russian branch.
The trading of the Chinese yuan and Russian ruble has increased year by year, with a great variety of currency products and trading tools, as well as a rapid growth of the cross-border settlement in yuan, Zhao told Xinhua in an exclusive interview.
With this positive trend, it is believed that the yuan-ruble settlement is the prerequisite for further development of economic cooperation between China and Russia, Zhao said.
As one of the hallmarks of bilateral financial cooperation, the yuan-ruble settlement has helped both countries and would continue helping expand cooperation fields, Zhao said. It would also help both countries in their fight against the global economic crisis and ensure a sustainable, deepening strategic cooperation, the bank director said.
The China-Russia energy cooperation could bring a dramatic growth of local currency settlements, which is just one aspect of the potentials brought forth by the yuan-ruble transaction. Bilateral trade and investment are believed to maintain their momentum and high growth rates, while more development possibilities could emerge, Zhao said.
Meanwhile, the use of local currencies would help enlarge the scale of bilateral trade and direct investment, which could, Zhao said, expand the bilateral financial cooperation that is currently limited to inter-bank cross-border trade settlement and project financing.
Financial products denominated in yuan and ruble would mushroom and facilitate the transactions of both countries' financial institutes and enterprises in a broader monetary and capital market.
Zhao added that the deepening China-Russia cooperation, fueled by China's Belt and Road Initiative, the process of yuan internationalization and Russia's Far East development project, would definitely speed up the expansion of the local currency settlement.
Moreover, both China and Russia are working on infrastructure construction and improvement of their payment systems, which could create a sustainable development environment for the cross-border local currency settlement.
In order to provide a convenient, safe and stable environment for transactions in both local currencies, Zhao suggested establishing a closer joint cooperation mechanism to coordinate on market entry mechanisms and to provide more investment channels as well as hedges against financial risks.
He also mentioned that both China and Russia should work on improving the formation mechanisms of currency exchange rates.
The local currency transaction was first used in both countries' border regions. More and more Chinese and Russian financial institutes and enterprises are using local currencies to invest and settle accounts nowadays, as the yuan-ruble trade platform is becoming more established and the transaction network is expanding amid deepening China-Russia economic and financial cooperation.
During his visit to Russia from May 8 to 10, Chinese President Xi Jinping and Russian President Vladimir Putin signed a joint statement to promote the local currency settlement in bilateral trade and deepen cooperation in export credit, insurance and trade financing among many other fields.