China’s ICBC Provides RMB Clearing Services in Russia

March 27, 2017 Posted by China Briefing Reading Time: 3 minutes

The Industrial & Commercial Bank of China (ICBC) has begun providing Chinese RMB clearing services in Moscow. The facility will ease the use of RMB as a trading currency between the two nations, and expedite the use of transactional settlements in financial services and cooperation between the two. The facility began operating on March 22nd.

Russia’s central bank announced the inclusion of the RMB in its national foreign exchange reserves at the end of 2015.

Dmitry Skobelkin, deputy governor of the Central Bank of the Russian Federation, stated in a press release, “Financial regulatory authorities of China and Russia have signed a series of major agreements, which marks a new level of financial cooperation. The launching of RMB clearing services in Russia will further expand local settlement business and promote financial cooperation between the two countries.”

The move to permitting settlement in RMB is one of many strategic positions that Russia has taken in the wake of financial and trade sanctions placed upon it by the US and EU, who are now losing leverage over Moscow as the country turns east for alternative trade partners.

In 2016, Russia overtook Saudi Arabia to become China’s largest oil provider, and China has been Russia’s largest trade partner for six consecutive years. Trade turnover between Russia and China from January to February 2017 grew by 37.1 percent year-on-year, outstripping growth between China and other major trade partners.

China, India, and Singapore are among many Asian countries looking to sign free trade agreements with the Moscow-backed Eurasian Economic Union, while Russia is a key regional player in China’s One Belt, One Road initiatives.

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