A farewell to dollar... China to launch yuan-ruble swaps from Dec 29. --------- The worlds largest economy China is also launching trading in contracts with the Malaysian ringgit and the New Zealand dollar, People’s Bank of China reported on Friday China’s readiness to back up Russia’s financial system with its national currency is a sure sign of mutual trust and mounting cooperation between the two countries. On Monday, China’s Foreign Minister Wang Yi said China was prepared to support Russia with the yuan and that Russia had the opportunities and wisdom for finding out a way of the economic turmoil. The issue in focus is a 150-Billion-yuan (25 Billion USD or 20 Billion Euro) swap deal between the Bank of Russia and the People’s Bank of China, which allows the central banks to directly buy yuan and ruble in the two currencies, rather than via the US dollar. The basic agreement on currency swaps the Bank of Russia and the Peoples Republic of China concluded last October is meant to reduce the role of the US dollar, if China and Russia need to help each other overcome a liquidity squeeze. “The yuan-ruble swap deal was not just a financial matter, Wang Feng, chairman of the Shanghai-based private equity group Yinshu Capital told the South China Morning Post. It has political implications as it is a sign of mutual trust. The settlements in roubles and yuans bypassing the dollar will greatly benefit Russia’s financial institutions, which have been denied a chance to borrow from Western banks. China’s banks are beneficiaries, too. The swap line is not charity but a solution that benefits both sides. itar-tass/en/economy/769429
Posted on: Sat, 27 Dec 2014 08:28:46 +0000
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