Reply #74: Russia, China Consider Giving up Dollar in Bilateral Trade [View All]

[54anickel]

http://www.mosnews.com/money/2005/08/29/chinacurrency.shtml

Russia and China might consider replacing the U.S. dollar in bilateral trade, a senior banking expert said on the eve of the Third Russian-Chinese Banking Forum which is set to open on Monday, Aug. 29.

Garegin Torsunyan, president of the Association of Russian Banks (ARB) was quoted by RIA Novosti as saying: “There are many ways to establish direct currency exchange and appropriate exchange rates with our Chinese partners.”

A certain step in this direction has already been made with Russian and Chinese banks allowing the companies to open mutual corresponding accounts. At the same time, Torsunyan said it was difficult to establish direct currency exchange because the Russian currency was not convertible abroad.

The use of the dollar in servicing Russian-Chinese trade is the result of Russia’s monetary policy, the expert said. “The fact that we have been using the dollar in our trade with a neighboring country for many years while having a more stable and undervalued domestic currency is the result of our monetary and economic policy,” he said.

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