The Micex Stock Exchange in Moscow will start ruble-yuan trading next week as Russia and China seek to reduce the use of the U.S. dollar in bilateral transactions.
The Micex, Russia’s biggest stock market by volume, expects about 3 million yuan ($451,128) to change hands per day when trading starts Dec. 15, according to a presentation in Moscow by Micex Vice President Igor Marich. Trading will last one hour, from 10 a.m. to 11 a.m. local time.
“I don’t expect to see huge trading volume for this currency pair,” Micex President Ruben Aganbegyan said. “But a journey of a thousand miles begins with a single step.”
President Dmitry Medvedev has repeatedly promoted the use of regional reserve currencies as a way to offset the influence of the dollar and euro. China is allowing greater use of its currency for cross-border transactions to reduce reliance on the U.S. currency, after Premier Wen Jiabao said in March he was “worried” about holding assets denominated in the greenback.
Chinese companies buying Russian products including timber, seafood and coking coal and Russian companies importing Chinese goods will be interested in the direct yuan-ruble trade, Viktor Melnikov, deputy chairman of Russia’s central bank, said at today’s conference.
Clients of Russian banks doing business in China will be able to save as much as 5 percent of transaction costs by buying yuan through the Micex, Melnikov said, without elaborating. China started offering yuan-ruble trading last month.
There’s a “discrepancy between China’s share of global trade, GDP and the lack of convertibility” of the yuan, Alexei Ulyukayev, first deputy chairman of Russia’s central bank, said on Nov. 24. “If this discrepancy will be overcome quickly,” then the yuan will become a global reserve currency, Ulyukayev said in an interview in Moscow.
The world’s second-largest economy needs to make the yuan fully convertible gradually to facilitate the currency’s internationalization, Xiao Gang, chairman of Bank of China Ltd., wrote in a commentary published in the China Daily today.
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