Buh-Bye To The Buck: Russia & China Open Trade Agreement With Payment In Rubles & Renminbi

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Our previous coverage of this story is here...

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Source - NYT

MOSCOW — Russia and China are poised to take a small but symbolic step in their expanding economic relationship, a move that in the long term could make the dollar less relevant to business between the two nations.

On Wednesday, a Moscow securities exchange opened direct trading between the Chinese currency, the renminbi, and the Russian ruble.  If the market develops, it could eventually cut the dollar out of a portion of Russian and Chinese trade.

Although China’s business with Russia is only a sliver of what it does with the United States, there is room to grow: Russia is the world’s largest energy exporting nation, and China a big consumer as the world’s second-largest economy, behind the United States. And yet when a railroad tanker of Russian oil crosses the border into China, the transaction is settled in dollars.

The new currency exchange is meant to start changing that. The trading system will operate through the Moscow Interbank Currency Exchange, or Micex, which is Russia’s largest stock exchange and also handles foreign currency transactions. It will be the first trading in the Chinese currency outside mainland China and Hong Kong.

“We are pioneers,” a Micex spokesman, Nikita N. Bekasov, said in a telephone interview. In the long term, if other nations moved in the same direction, trading in renminbi outside China could diminish demand for the dollar. Chinese companies exporting to Russia or other countries could instead buy local currency directly, without the need for dollars as a common currency to conduct their business.

Initially, the Micex renminbi-ruble session will last one hour each morning, timed for trading with banks in Russia’s Far East near the Chinese border, many time zones ahead of Moscow.

“It has symbolic value,” said Peter Westin, the chief economist at Aton, a brokerage firm in Moscow.

The development coincides with the opening of a trans-Siberian oil pipeline that is expected to expand Russia’s trade with China by freeing up railroad capacity for exports of coal, metals or other commodities, and could make it easier to do business along the remote border.

“If China places some part, even a small part, of its reserves in rubles, this is a major boost to the global fortunes of the ruble,” Yaroslav Lissovolik, chief economist at Deutsche Bank in Moscow, said in an interview.

Continue reading at the NYT...

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Over the weekend Putin sings I found my thrill on Blueberry Hill...

No comment.  Actions begins at 1:20.

Comments

[DailyBail]

http://www.nytimes.com/2010/12/15/business/global/15iht-ruble15.html?_r=4&pagewanted=print

source...

[DailyBail]

« Russia, China Abandon Dollar In Trade Agreement »

http://dailybail.com/home/russia-china-abandon-dollar-in-trade-agreement.html

[DailyBail]

« Oh Dear God: Vladimir Putin Sings 'I Found My Thrill On Blueberry Hill' Live At Huge Celebrity Gala (VIDEO) »

http://dailybail.com/home/oh-dear-god-vladimir-putin-sings-i-found-my-thrill-on-bluebe.html

[DailyBail]

Paulson Says Russia Urged China to Dump Fannie, Freddie Bonds

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afbSjYv3v814

[DailyBail]

Russia Accused Of Cooking The Books Ahead Of Its Huge Upcoming Bond Issue

Read more: http://www.businessinsider.com/is-russia-cooking-its-books-ahead-of-its-bond-issue-2010-3#ixzz18H3DqFdw

[DailyBail]

« Video: The Bizarre Story Of Hermitage Capital & The Russian Mafia »

http://dailybail.com/home/video-the-bizarre-story-of-hermitage-capital-the-russian-maf.html

[S. Gompers]

This is definitely a good sign for those seeking the destruction of the dollar and commutation of the U.S. into a third world status.

[john]

http://www.themoscowtimes.com/business/article/aeroflot-orders-4bln-of-planes-from-boeing/426945.html

Now for more news in the metals market.

http://en.rian.ru/russia/20101216/161804605.html

A little about Norilsk:

http://www.nornik.ru/en/about/

John Paulsons big bet...

http://regator.com/p/226890780/john_paulson_makes_huge_bet_on_ipo_of/

[DailyBail]

good to have you back john...

[DailyBail]

@gomp...we need a new fed chairman who cares more about the dollar and less about the banks...

[john]

China and India to increase bilateral trade to 100 billion by 2015.

http://www.hurriyetdailynews.com/n.php?n=way-of-the-dragon-the-elephant-in-global-trade-2010-12-16

[S. Gompers]

Agree, but it probably won't happen.

[DailyBail]

i was just dreaming gomp...

another nice link john...

[Hey Dude]

Just a gigolo John Kerry says “why would we have to read something?” How silly, the delays are cutting into his vacation on his yacht aptly named Unpaid Taxes with his saucy ketchup heir wifey. As usual, the Dems get a pass, thanks Jake Slapper. Why not, when we decided they were all the same we got the right to pick on the ones we don’t like and the ones who are, wait for it, religious. Does she really believe that man and dinosaur broke bread together? While they deny Lt. Col. Lakin a defense and make him pay dearly for questioning the American Fuhrer from Kenya, the real guilty get lauded and encouraged to continue to destroy the country. So we go after the new Republican majority and dig up old skeletons. Why not, we can check Drudge and RT for current and relevant news. Pelosi is still willing to strut her bony leftist ass like she is still the liberal mess of a queen the Marxist wanted her to be.

[john]

Aeroflot to sell stake. (Norilsk Nickel is Involved).

http://en.rian.ru/business/20101217/161816291.html

This is the link from my post above. Look at who may be financing the deal.
http://en.rian.ru/russia/20101216/161804605.html

[john]

http://www.zerohedge.com/article/cme-hikes-margins-across-board-copper-palladium-silver-and-oddly-ir-swaps-treasurys-and-fed-

[john]

This story involves hedge fund fraud. Money was sent to banks in the Ukraine. It has nothing to do with Russia or PM Putin, but the players are from the US and Ukraine is where the money was sent. Interesting.

http://www.hedgefund.net/publicnews/default.aspx?story=12032

[john]

S.Africa a candidate to join BRIC.

http://www.bloomberg.com/news/2010-12-15/south-africa-says-importance-not-size-makes-it-candidate-for-bric-group.html

S.African lawmakers attacked in Israel.

http://www.presstv.ir/detail/155906.html

[john]

TSA insults India.

http://www.aolnews.com/2010/12/10/tsa-defends-screening-of-indian-ambassador/

Then India signs another business deal with Russia.

http://en.rian.ru/business/20101219/161843461.html

[DailyBail]

nice links..thanks...just getting back into things after taking 2 nice days off...

[john]

The great awakening of Vladimir Putin.

http://www.counterpunch.org/whitney01052011.html

[snip]

The clash in South Ossetia was a valuable lesson for Putin who had hoped that US/Russia relations would gradually thaw. Now he knows that's not possible. When another nation kills your people, everything changes. Each side becomes more inflexible and the prospects for peace dim. At the same time, US strategic objectives in Central Asia haven't changed at all, so Putin must prepare for the next confrontation. That's why he's strengthening alliances that challenge US dominance in the region and in the world. That's why he's looking for opportunities to weaken US power and erode US prestige. That's why he wants to dump the dollar. It's all preparation.

When trouble breaks out, Putin will be ready.

[john]

Ex-Bank of Moscow Chief to Seek Removal from Interpol List

http://en.rian.ru/world/20130302/179768649/Ex-Bank-of-Moscow-Chief-to-Seek-Removal-from-Interpol-List------.html

[snip]

Self-exiled former Bank of Moscow chief executive Andrei Borodin, who has been granted political asylum in Britain, said on Friday he would seek his removal from the Interpol international wanted list.

“We would press for being removed from that list,” Borodin said in an interview with the Prime news agency.
Russian investigators launched a criminal case against Borodin and his former first deputy Dmitry Akulinin in late 2010 on charges of large-scale fraud involving state funds at Bank of Moscow, which functioned as the capital's chief investment vehicle under former Moscow Mayor Yury Luzhkov.

Last August, Interpol issued a red notice for Borodin and his deputy Dmitry Akulinin. An Interpol "red notice" is equivalent in meaning to an international arrest warrant and any member state that knows the whereabouts of an individual on the list is required to arrest him.

Borodin said that there were no precedents of successful removal from the Interpol list, though a number of such appeals are currently being considered. He did not comment on whether Akulinin will also seek the cancellation of his red notice, saying he was not authorized to speak on his behalf.

“I think we would follow the example of people who have already began proceedings required to remove their name from Interpol lists,” the former banker said. “In our opinion, Russia abuses its rights of an Interpol member, by organizing politically motivated criminal cases at first and later by putting those people on Interpol lists.”

He said he was set to resume international financial activities in the future, but did not elaborate.
Borodin fled to Britain in April 2011 after Luzhkov was fired by then-President Dmitry Medvedev in September 2010. Initially, he denied asking for asylum and said he was visiting the UK for medical treatment.