China-Russia dollar move may signal conclusion to adjustment of yuan

China and Russia have stopped utilizing the United States of America dollar for bilateral transactions, a move announced Wednesday. Word came from St. Petersburg about the decision as the two nations met there for a conference on Trade and energy cooperation. United States of America currency exchange isn’t expected to be affected and the move could expose the yuan to global sector forces that determine the value of other currencies.

Dollar to become extinct among bilateral transactions with Russia and China

There is no more connection with China, Russia, and the American dollar anymore. China and Russia are former enemies that required importers from each country to use a third-party currency for bilateral transactions. They chose to use the American dollar as their form of trade and had their trade valued at $ 38.8 billion last year alone. By the end of this year their trade value is estimated at around $ 60 billion. Now the two countries will have to use either rubles or yuan when participating in trade.

Behind the China-Russia dollar move

The Russian ruble is a part of the Chinese stock exchange already. Moscow will see the Chinese yuan on their stock market as early as December. International Business Times reports that this change has nothing to do with America. This is merely a precaution taken by the two countries in the wake of the global financial crisis. A China-Russia oil deal may be the main reason for the switch from the dollar. Soon a Siberian pipeline will pump over 1 billion barrels from Russia to China every year. Russia wants its commodities exchange to trade for oil in rubles.

What issues arise from international money?

Nothing is going to change with the dollar and how it impacts International trade. The whole planet has been anticipating the switch for China and Russia trade for some time now. China has been able to manipulate the yuan for some time, and America is happy that this should stop that from taking place any longer by giving the yuan a specific value on the trade market.

Information from

International Business Times

ibtimes.com/articles/85216/20101124/china-russia-dollar-vladimir-putin-wen-jiabao-ruble-yuan-bilateral-trade.htm

Business Insider

businessinsider.com/china-and-russia-drop-dollar-for-bilateral-trade-2010-11

NASDAQ

community.nasdaq.com/News/2010-11/china-russia-open-up-nondollar-trading.aspx?storyid=46466