Russia, China Consider Bilateral Trade in National Currencies to Cut Dollar Use

Monday, November 5, 2018
By Paul Martin

As relations with the West deteriorate, Russia and China are discussing new measures to boost cross-border trade using each other’s currencies.

Russia and China are engaged in talks over the establishment of a cross-border payment system which would use their national currencies, the Russian government’s First Deputy Chief of Staff Sergei Prikhodko told reporters ahead of Russian Prime Minister Dmitry Medvedev’s visit to China.

“The subject of mutual settlements was on the agenda of the latest session of the subcommittee on financial cooperation, which took place in Shenzhen in late September. Among others, the topic of creating a cross-border settlement system with active use of national currencies is being discussed,” Prikhodko said.

Prikhodko also reminded that the two countries were working to agree upon arrangements for mutual settlements in their national currencies.

“This is an urgent task – due to the US sanctions, it is essential to have new mechanisms to conduct mutual settlements between the economic entities of both countries. We presume that the transition to settlements in national currencies will significantly reduce sanctions risks and the dependence of bilateral trade on the US dollar, to avoid exchange rate fluctuations and fees for the transfer of money. Ultimately, these measures will increase the status of the national currencies,” he said.

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