China, Russia Quit Dollar


Inquiring minds are shaking their heads tonight over a report from St. Petersberg in China Daily stating that both China and Russia have quit the dollar. Both countries will use their own currencies in bilateral trade:

Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies.

“About trade settlement, we have decided to use our own currencies,” Putin said at a joint news conference with Wen in St. Petersburg.

The two countries were accustomed to using other currencies, especially the dollar, for bilateral trade. Since the financial crisis, however, high-ranking officials on both sides began to explore other possibilities.

The yuan has now started trading against the Russian rouble in the Chinese interbank market, while the renminbi will soon be allowed to trade against the rouble in Russia, Putin said.

“That has forged an important step in bilateral trade and it is a result of the consolidated financial systems of world countries,” he said.

The documents that were signed covered cooperation on aviation, railroad construction, customs, protecting intellectual property, and energy cooperation among others.

Please also see ‘Coal War’ With China Next Up? and Dollar to Become World’s `Weakest Currency’

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