BEIJING, April 16. /TASS/. Doing business in national currencies will foster trade and investment ties within the Shanghai Cooperation Organization (SCO), SCO Secretary-General Zhang Ming said in an interview with TASS First Deputy Director General Mikhail Gusman.
"Gradually expanding the practice of using national currencies in mutual payments encourages the development of trade and investment cooperation within our organization," he said, adding that since 2022 member states have been working actively to implement the SCO Roadmap on gradually increasing the share of national currencies in mutual payments. An expert group made up of representatives from central banks and finance ministry officials has been created especially for this purpose.
At this point, the group is laying the foundation for how this national currency payment system will work, the Secretary-General noted. "Specialists are thoroughly analyzing any disparities in currency regulation legislation, identifying potential constraining factors and how to work around them. The possibility of creating sources of liquidity in national currencies and of organizing direct trading in national currencies on stock markets is being explored. Proposals on possible mechanisms of clearing payments are being developed considering the peculiarities of SCO member states’ payment systems," he explained.
The next stage will be to search for how best to jointly invest national currencies in stock market instruments, carry out lending for investment projects and structure of deals in national currencies, Zhang Ming said. There are also plans to establish alternative channels to exchange financial information.
"At the bilateral level the work on increasing the share of national currencies in mutual payments between individual member states is progressing quite dynamically. For example, a serious increase in mutual trade turnover between China and Russia was made possible over the past few years due to, among other things, efforts to expand the share of national currencies in mutual payments," he said. The official expressed hope that such dynamics will also facilitate multisided efforts within the Shanghai Cooperation Organization.
Founded in 2001, the SCO is an intergovernmental organization that currently brings together India, Iran, Kazakhstan, China, Kyrgyzstan, Pakistan, Russia, Tajikistan and Uzbekistan. At the most recent SCO summit in New Delhi last June, Belarus signed a memorandum of commitment in order to obtain the status of a member state of the organization. In total, the SCO family, which includes dialogue partners and observers, consists of 26 countries.