Moscow, Beijing draw closer in banking

Central Bank of Russia opens first overseas office in Beijing as part of 'strategic partnership'

China and Russia will strengthen financial cooperation, especially in the fields of currency exchange, currency settlements and banking cooperation, according to currency officials from both countries.

Yi Gang, deputy governor of the People's Bank of China, says economic cooperation has been strengthened more than ever, and bilateral trade reached $59.5 billion (55.1 billion euros; 47.8 billion) in 2016.

The trend toward closer ties continued as the Central Bank of Russia opened its first overseas office in Beijing on March 16. The move is said to enhance the financial ties of China and Russia. The Central Bank of Russia, known as Bank of Russia, is the main regulator of the Russian banking industry, responsible for banking licenses, rules on banking operations and accounting standards.

"The office in China is the first for the Russian Federation's currency authority," says Dmitry Skobelkin, deputy governor of Bank of Russia.

"The establishment of the new office, along with our cooperation with the PBOC, demonstrates the development of our comprehensive strategic partnership."

Zhou Xiaochuan, governor of the People's Bank of China, signed an agreement with his Russian counterpart, Elvira Nabiullina, in June, allowing the Bank of Russia to open the office.

"Various financial agreements have been signed by the two governments in the past year, including cooperation between currency authorities and banks from both sides," he says.

Yi says that bilateral financial cooperation developed quickly last year, when the PBOC authorized the Industrial and Commercial Bank of China in September to be the clearing bank for the renminbi and the rouble.

Skobelkin says a renminbi clearing house was opened on March 22 in Moscow, a precondition for issuing bonds.

He also notes that Russia's Finance Ministry is to issue $1 billion in renminbi denominated bonds of unspecified duration in "one to two months".

Andrei Denisov, the Russian ambassador to China, says: "The new office will help Russian banks solve their problems in capital settlement and currency clearing in China, and increase the attraction of the Russian financial market to Chinese investors."

Vladimir Shapovalov, the senior official at the Bank of Russia, says the new office will start to focus on some new directions in bilateral financial cooperation, such as gold trading.

"Russian gold was listed successfully on the Shanghai Gold Exchange last year," he says. "Now we are talking with PBOC for a new memorandum of understanding about gold trading; and it will provide solutions for some technical problems in gold trading between the two countries."

renqi@chinadaily.com.cn