Share Of Russia-China Transactions In National Currencies Reaches 15% - Russian Ambassador

The increase in share of transactions between Russia and China in national currencies is provided not only by US sanctions, but also by a desire to enter a more stable system of interstate payments, and the share of such transaction in the total volume has already reached 15 percent, Russian Ambassador to China Andrey Denisov said on Wednesday.

BEIJING (UrduPoint News / Sputnik - 12th December, 2018) The increase in share of transactions between Russia and China in national currencies is provided not only by US sanctions, but also by a desire to enter a more stable system of interstate payments, and the share of such transaction in the total volume has already reached 15 percent, Russian Ambassador to China Andrey Denisov said on Wednesday.

"Most of transactions in our trade are still carried out in US Dollars, but lately the share of national currencies in national transactions has been growing at a quite rapid pace. This is provided not only by sanctions, unilateral US sanctions in using the banking system, but also simply by the desire to enter a more stable system of interstate transactions ... Today, the use of national currencies in bilateral transactions has already reached 15 percent and this amount will only increase as it is convenient for both the Chinese side and for us," Denisov said.

The diplomat noted that these transactions do not cover the energy sector yet.

"They are mainly used in other areas of cooperation, including in the field of supplies of finished products, agricultural products, machinery and technical products," Denisov added.

Trade in energy sector still cannot be carried out in national currencies as there are internationally accepted models of transactions that closely connect the banking sector, the production sphere, and the trading sphere, the diplomat explained.

"But in the future, perhaps, this trade in this sector will also be more and more often carried out in national currencies," Denisov said.

In November, the head of the Russian state development bank Vnesheconombank, Igor Shuvalov, told reporters that Russia and China could sign an agreement on transactions in national currencies by the end of the year. The draft agreement has already been submitted to Russian Prime Minister Dmitry Medvedev and Chinese President Xi Jinping.

In 2018, Russian companies in China faced a number of serious problems due to the fact that Chinese banks tightened their policy toward Russian legal entities, which face closure of foreign Currency accounts and denial of providing service due to anti-Russian sanction. Fears of Chinese banks against the background of trade disputes between China and the United States are associated with the sanctions bill that was submitted to the US Congress in August. It provides for a whole range of anti-Russian measures, including sanctions against the new state debt of the Russia and state-owned banks, including Vnesheconombank, Sberbank, VTB, Gazprombank, Rosselkhozbank and Promsvyazbank.