China and Russia have stopped using the United States of America dollar for bilateral dealings, a move announced Wednesday. Trade officials from the two nations announced the transfer as they met in St. Petersburg to work on Trade issues and energy deals. The dollar is expected to continue its role in international Trade unaffected, while the yuan, under protection from the Chinese government, could be a little more vulnerable to global developments that determine the value of other currencies. Resource for this article – China-Russia dollar move may signal end to manipulation of yuan by Money Blog Newz.
No more dollar to be used in China and Russia bilateral transactions
There is no more connection with China, Russia, and the American dollar anymore. The relationship between China and Russia has long been one of discontent. Because of this the two countries have used a third party currency to negotiate trade. Last year their trade was estimated to be valued at $ 38.8 billion with the use of the American dollar as their third party trade price. By the end of this year their trade value is estimated at around $ 60 billion. As of Nov. 24, either rubles or yuan must be used for all Russia-China trade.
Powers forcing the China Russia exchange change
The Russian ruble is already traded on the Chinese stock exchange. The Chinese yuan is expected to start trading in Moscow in December. International Business Times reports that this change has nothing to do with America. Because of the global financial crisis this is just a step to protect both countries and their trade with each other. A China-Russia oil deal may be the main reason for the switch from the dollar. A new Siberian oil pipeline will soon pump 1 billion barrels of Russian oil into China every year. Russia is requesting the oil be exchanged through rubles.
What issues arise from international money?
The dollar will still play the same role in International trade as it always has. The whole planet has been anticipating the switch for China and Russia trade for some time now. The United States has wanted the Chinese yuan to be viewed differently in international trade for a while now, and this is the first step in stopping China from manipulating its value.
Articles cited
International Business Times
ibtimes.com/articles/85216/20101124/china-russia-dollar-vladimir-putin-wen-jiabao-ruble-yuan-bilateral-trade.htm
Business Insider
businessinsider.com/china-and-russia-drop-dollar-for-bilateral-trade-2010-11
NASDAQ
community.nasdaq.com/News/2010-11/china-russia-open-up-nondollar-trading.aspx?storyid=46466
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