Going Global: Russian Currency Authorized for Circulation in Chinese City

The People’s Bank of China (PBC) has officially authorized the Russian ruble to be used alongside the yuan in the north-eastern city of Suifenhe City on the China-Russia border.

Jin Mei, deputy secretary general of the PBC’s monetary policy committee, made the announcement at the opening ceremony of a trade exposition in the city on Saturday.

According to Mei, the decision came as a result of the "benign development" in switching bilateral trade operations from the US dollar to the yuan and ruble.

Suifeihe City is a main trade hub of Heilongjiang Province. It accounts for 80 percent of Heilongjiang’s export to Russia.

The ruble has already been widely circulated in the city, including shops and hotels targeting Russian customers, local sources said.

Local authorities said the authorized circulation of ruble will contribute to bilateral economic ties and tourism and will not pose a threat to the renminbi as the domestic currency.

In the first half of 2015, cross-border yuan-denominated payments between Russia and China reached $1.32 billion, Mei said.

In 2014, the Russian Central Bank agreed to a 150 billion yuan (some $24.5 billion) three-year swap line with the PBC. According to the Russian side, the agreement was not a major precondition for switching payments to ruble and yuan. It created an additional possibility for Russian and Chinese banks and their clients to acquire access to rubles and yuan resources.