That is, transactions involving the simultaneous purchase and sale of currency of one country for the currency of another country.
The draft agreement on currency swap has been agreed upon. However, neither the Central Bank of Russia nor the People's Bank of China has yet to comment on the possible volumes of the program on currency swaps. Also, launching date of the program has not been announced as yet. Yet, it is quite clear that the sides will try not to get caught up in lengthy formal procedures prior to the signing of such an agreement. Undeniably, regulators have already given out an indication that the agreement will open Russian companies’ access to the Yuan and their Chinese partners to the ruble.
The agreement between regulators of the two countries is also a new sign to the United States, that in the background of Western sanctions, Russia and China are building a model of cooperation that excludes the dollar from circulation. This very fact has drawn the attention of Sergei Khestanov, managing director of the group of companies “Alor”:
“The increase of Western pressure on Russia will naturally cause a growth of trade and economic relations between Russia and other countries, especially the Asian. In May, a contract valid for a 30-year old supply of Russian gas to China was signed. After that, it became clear that the vector of economic interests of Russia is gradually shifting from the West towards the East. Naturally, it cannot but cause irritation to the leading Western countries”.
Western sanctions imposed against Russia, due to its stand on Ukraine has increased the already considerable authority of the Yuan amongst Russian companies. In July, the trading volume of yuan-ruble jumped up by 52 percent as compared to June. And on the 31st of July, a record result was set on the trading of this currency pair on the Russian stock exchanges. Chief Researcher of the IMEMO, Salitsky Alexander considers that this trend will continue to gain momentum:
“We will unconsciously increase our dependency on China. This is an objective trend of the global economy. China is already a major trading nation. And inevitably, there will be an increase of the proportion of goods that we will be buying from there. Accordingly, our export share of the goods, as per the last major agreements concluded for supply of gas and oil will only increase. And here, it is important to provide for our oil and gas corporations with a continuing increase of their intake of yuans for their goods delivered to China. Perhaps, one of the ways to increase their interest in such assessment could be an increase of the presence of our corporations in the Chinese domestic market. This will significantly increase the volume of transactions in yuan and rubles, and will phase out the use of the dollar from circulation in this segment.
Experts note that for the United States, the events in Ukraine are just an excuse to impose sanctions on the supply of oil and gas equipment to Russia. Their goal is the redrawing of the energy map of the world, where Russia plays a dominant role. Russia, in this regard, can answer by phasing out the use of the dollar for the purchase and sale of energy resources. Currency settlements in national currencies with China, India, Iran, Turkey, in rubles and Euros - with the European Union would deprive the United States of its leverage over the market it has thanks to the dollar. And this in turn will create a new scope for maneuvering to try to get rid of the hegemony of the dollar.
Read more: http://indian.ruvr.ru/2014_08_12/REJECTION-DOLLAR-RUSSIA-CHINA/