“The draft document between the Central Bank of Russia and the People’s Bank of China on national currency swaps has been agreed by the parties” and is at the stage of formal approval procedures, the Russian regulator’s press office said.
The volume of national currency swaps and the time of their launch will depend on the demand for this instrument, the press office said.
The swap agreement will boost the potential for using Russian rubles and Chinese yuans in trade settlements, the press office said.
“The agreement will stimulate further development of direct trade in yuans and rubles on the domestic foreign exchange markets of Russia and China,” the press office said.
The Russian monetary regulator announced on July 8 after a trip by Russia’s Central Bank chief Elvira Nabiullina to China that the parties had discussed an agreement on ruble-yuan swaps. The Russian Central Bank said at the time that the swap agreement could be signed in the near future.
Nabiullina earlier said the Russian Central Bank was in talks with China on a multilateral swap system, using foreign exchange reserves.
“We have reached a high degree of readiness for ruble-yuan swaps to facilitate trade financing,” the Russian Central Bank chief said in early July.
A currency swap is a foreign exchange transaction for the simultaneous purchase and sale of a specific amount of one currency in exchange for another currency with two different settlement dates. A currency swap is a wide-spread foreign exchange instrument, which has a larger share in market turnover than spot and forward transactions.