Yuan-Ruble Trade Starts as Russia, China Shun Dollar

all those petrodollars not being spent are coming back home driving up inflation---higher food and gas prices




Yuan-Ruble Trade Starts as Russia, China Shun Dollar

December 15, 2010, 3:40 AM EST
(Adds closing price in second paragraph.)

Dec. 15 (Bloomberg) -- Moscow’s Micex exchange started trading the yuan against the ruble for the first time today, as Russia and China seek to reduce the use of dollars in trade.

The ruble closed at 46.3405 per 10 Chinese yuan by 11 a.m. in Moscow, after opening at 46.35 per 10 yuan shortly after 10 a.m. By the end of trading the volume of transactions amounted to 4.92 million yuan ($738,850), or 22.78 million rubles, according to the index’s data.

Both China and Russia have called for the dollar’s role in global trade to be diminished since the global financial crisis, and Russia is promoting the ruble as a reserve and trading currency within the former Soviet Union. China is allowing greater use of the yuan, which is not yet fully convertible, in international transactions as it seeks to reduce its reliance on the greenback. Asian exchanges that trade palm oil derivatives and gold are starting to accept yuan as payment and collateral.

“This event will become part of history in Russia-China relations, in the history of our financial markets,” Viktor Melnikov, a deputy chairman of Russia’s central bank, said at a ceremony to launch the trade at the Micex headquarters in Moscow, attended by China’s Ambassador to Moscow Li Hui. “No doubt this will become a serious catalyst for economics and trade.”

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