China’s ICBC starts renminbi clearing services in Russia
MOSCOW – Industrial and Commercial Bank of China (ICBC) officially started operating as a Chinese renminbi (CNY) clearing bank in Russia Wednesday, a move set to facilitate the use of the currency and cooperation in various fields between the two countries.
“Under the guidance of the governments and central banks of both countries, ICBC’s Moscow branch will effectively fulfill its responsibility and obligation as a renminbi clearing bank by taking further advantage of its leading edge in renminbi businesses, providing customers with safe, high quality and convenient clearing services,” said Hu Hao, ICBC’s deputy governor, at the opening ceremony.
“Financial regulatory authorities of China and Russia have signed a series of major agreements, which marks a new level of financial cooperation,” said Dmitry Skobelkin, deputy governor of the Central Bank of the Russian Federation.
“The launching of renminbi clearing services in Russia will further expand local settlement business and promote financial cooperation between the two countries,” the official added.
With the continuous deepening of the Russia-China comprehensive strategic partnership of coordination in recent years, the two countries are now starting to enhance local currency cooperation.
At the end of 2015, the Russian central bank announced the inclusion of the renminbi in its national foreign exchange reserves, making it Russia’s officially recognized reserve currency.
During Russian President Vladimir Putin’s visit to China in June last year, the central banks of the two countries signed a memorandum of cooperation in starting renminbi clearing services in Russia, just three months before ICBC’s Moscow branch was appointed by China’s central bank as the clearing house for settling renminbi transactions there.
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Russia’s Central Bank opens representative office in Beijing
BEIJING, March 16. /TASS/. The Bank of Russia has opened its first representative office in Beijing, TASS correspondent reported from the opening ceremony.
The regulator’s Deputy Governor Dmitry Skobelkin said that the move “is in line with the task the countries are facing, and reflects the strategic nature of bilateral relations.” “We have managed to reach a new level of cooperation over the past years as a number of agreements signed set the pace of cooperation for many years ahead in almost all areas,” he said, adding that “it is very timely and will allow to boost the potential of bilateral cooperation in the financial sphere.”
The agreement on opening of the representative office of the Bank of Russia in Beijing was signed on June 21, 2016. This is the first representative office of the Bank of Russia abroad and the eighth created by foreign central banks in China, the Russian regulator said earlier.
Russia’s banking system has SWIFT alternative ready
“There were threats that we can be disconnected from SWIFT. We have finished working on our own payment system, and if something happens, all operations in SWIFT format will work inside the country. We have created an alternative,” Nabiullina said at a meeting with President Vladimir Putin on Wednesday.
She also added that 90 percent of ATMs in Russia are ready to accept the Mir payment system, a domestic version of Visa and MasterCard.
Izvestia daily reported that as of January 2016, 330 Russian banks had been connected to the SWIFT alternative, the system for transfer of financial messages (SPFS).
In 2014 and 2015, when the crisis in relations between Russia and the West were at their peak over Crimea and eastern Ukraine, some Western politicians urged disconnecting Russia from SWIFT.
In November 2015, Nabiullina said the SPFS was close to being completed.
The central bank’s website says the system was established “as an alternative channel for interbank cooperation with the aim of ensuring the guaranteed and uninterrupted provision of services for the transmission of electronic messages on financial transactions.”
At present, the system has some drawbacks. It doesn’t work from 9pm to 5am Moscow time and costs up to five cents per wire transfer, which is regarded expensive.