http://www.zerohedge.com/news/2014-08-09/de-dollarization-accelerates-chinarussia-complete-currency-swap-agreement
Submitted by Tyler Durden on 08/09/2014 14:21 -0400
http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20140810000113&cid=1101
Submitted by Tyler Durden on 08/07/2014 18:10 -0400
MOSCOW, August 08. /ITAR-TASS/. Turkey has promised to Russia’s veterinary watchdog Rosselkhoznadzor that it will soon give it the list of food suppliers to Russia, the agency said on Friday.
De-Dollarization Accelerates - China/Russia Complete Currency Swap Agreement
The last 3 months have seen Russia's "de-dollarization" plans accelerate. First Gazprom clients shift to Euros and Renminbi, then the UK signs currency swap agreements with China, then NATO ally Turkey cuts ties and mulls de-dollarization, Switzerland jumps in the currency swap agreements, and BRICS create their own non-US-based funding vehicle, and then finally this week, Russia's oligarchs have shifted cash holdings to Hong Kong. But this week, as RT reports, Russian and Chinese central banks have agreed a draft currency swap agreement, which will allow them to increase trade in domestic currencies and cut the dependence on the US dollar in bilateral payments. “"The agreement will stimulate further development of direct trade in yuan and rubles on the domestic foreign exchange markets of Russia and China," the Russian regulator said.
In early July, the Central Bank’s chairwoman Elvira Nabiullina said Moscow and Beijing were close to reaching an agreement on conducting swap operations in national currencies to boost trade. The deal was later discussed during her trip to China.President Vladimir Putin, during his visit to Shanghai in May, said cooperation between Russian and Chinese banks was growing, and the two sides were set to continue developing the financial infrastructure.“Work is underway to increase the amount of mutual payments in national currencies, and we intend to consider new financial instruments,” Putin said after talks with President Xi Jinping.
It appears the deal is done...
The Russian and Chinese central banks have agreed a draft currency swap agreement, which will allow them to increase trade in domestic currencies and cut the dependence on the US dollar in bilateral payments.“The draft document between the Central Bank of Russia and the People’s Bank of China on national currency swaps has been agreed by the parties,” and is at the stage of formal approval procedures, ITAR-TASS quotes the Russian regulator’s office on Thursday.The Russian Central Bank is not giving precise details on the size of the currency swaps, nor when it will be launched. It says this will depend on demand.According to the bank, the agreement will serve as an additional instrument for ensuring international financial stability. Also, it will offer the possibility to obtain liquidity in critical situations.“The agreement will stimulate further development of direct trade in yuan and rubles on the domestic foreign exchange markets of Russia and China,” the Russian regulator said.Currently, over 75 percent of payments in Russia-China trade settlements are made in US dollars, according to Rossiyskaya Gazeta newspaper.
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And as we have explained repeatedly in the past, the further the west antagonizes Russia, and the more economic sanctions it lobs at it, the more Russia will be forced away from a USD-denominated trading system and into one which faces China and India.
Sanctions prompt Russia to turn to China for precision components
A rocket carrying the GLONASS-K satellite at Russia's Plesetsk Cosmodrome on Feb. 26, 2011. (Photo/CFP)
Russia is looking to acquire electronic precision components worth several billion dollars from China in light of economic sanctions from Europe and the United States, reports Global Times, a tabloid under the auspices of the Communist Party mouthpiece People's Daily.
Citing Russian media reports, Global Times said Russian manufacturers will struggle to meet demand for electronic components required for the country's aerospace and military fields over the next two years due to ongoing sanctions over the Ukraine crisis.
As a result, Russia is turning to China to fill the gap, with one source from the Russian Federal Space Agency telling media outlets that they are currently working with the China Aerospace Science & Industry Corporation, the main contractor for the Chinese space program. The Chinese company's research and development center has already offered several dozen proposals on how their products can replace those previously acquired from the US, the source said, adding that they are currently in the process of translating the technical data, testing product sensitivity, temperatures and vibrations to assess component compatibility.
A spokesperson from another Russian missile and aerospace company said that given the economic sanctions, they are open to cooperating with China as long as the quality, manufacturing speed and pricing is competitive.
Russia acquires around US$2 billion in electronic components from the US every year, much of which goes into hi-tech systems in Russia's aerospace and military projects. Around 75%-80% of Russia's GLONASS-M satellite, for instance, is made from components supplied by Western countries.
Chinese military expert Wang Yanan told the Global Times that there is a strong chance of China and Russia working together due to economic sanctions. While the standard of China's component products and research and development are not the highest in the world, its product systems are very complete and self-sufficient, and are continuing to improve and advance, he said. If they can continue working together and build of each other's strengths, China and Russia could break down the electronics monopoly that has been held by the West for many years, he added.
An unnamed Chinese aerospace expert said in an interview with the Global Times that while China can help Russia solve a lot of its components shortage problems it cannot solve all its problems because some products cannot be perfectly replaced. Chinese products may also be incomplete or might require more time to properly match with Russian platforms. But buying from China has distinct advantages too, including security of supply and cheaper prices, the expert added.
Apart from electronic precision components, laser equipment at the Mulino training center of the Russian Ground Forces supplied by Germany can also be replaced by those produced by Chinese companies, accoring to Russian media reports.
http://www.zerohedge.com/news/2014-08-07/first-brics-bank-now-brics-food-bank
First BRICS Bank, Now BRICS Food Bank
Despite President Obama's dictating that Russia is increasingly "isolated," it appears they have found a whole new set of friends to play with in the global trade sandpit. In retaliation to Western sanctions, Putin yesterday unveiled a total food import ban from all sanctioning nations, and, just as the BRICS created their own 'IMF-lite' away from Washington's prying eyes, Russia plans to substitute banned goods with not just domestic supplies but imports from Latin America, China, and several other nations. Agriculture Minister Nikolai Fedorov said "no food shortages are expected," but more isolation for the West...
Russia is already turning away trucks at the border and cancelling orders (as FruitNet reports)
Catalan producer association Afrucat is urging its members not to send lorries to Russia until the situation regarding the ban on EU imports has been fully clarified, following reports that trucks laden with fruits and vegetables are already being refused entry at border crossings.“Initially it seemed that the Russian government was making its decision on a product-by-product and country-by-country basis after discussions with its producer associations to ascertain the possibility of meeting demand with local production, but as the morning wore on, a growing number of Russian importers starting cancelling orders – first as a precaution and subsequently as it was confirmed that trucks would be turned away at the border,” Afrucat said in a statement.
As Bloomberg reports,
Russia plans to substitute banned goods with domestical products, supplies from Latin America, China, North Africa, Israel, Turkey, former Soviet allies, Agriculture Minister Nikolai Fedorov tells reporters in Moscow.Russia may revise or narrow food import restrictions, not planning to widen them yetRestrictions could have been tougher; “That’s a necessary measure, we were forced to make these decisions”No mid-term pressure on inflation expected; import restrictions may lead to short-term, “emotional” CPI jumpNo food shortages expectedRussia should spend additional 137b rubles in 3-4 yrs on agricultural industry, according to ministry est.Country ready to defend position on food ban in WTOFood ban doesn’t apply to Switzerland
Russians won’t feel dramatic changes, incl. in restaurants; “bon appetit” to all, Fedorov says
- Russia can replace meat imports from U.S., EU, Canada, Australia with supplies from Brazil, Uruguay, Paraguay, Argentina, Belarus
- Russia will try to replace Norwegian red fish with domestic supplies, shipments from other countries
- Country consumes 2.345m mt of beef/yr, incl. 59kt from 5 banned suppliers
- Pork: consumption 3.415m t/yr total vs 450kt from 5 sanctioned suppliers
- Poultry: 4.28m t/yr total vs 338kt from banned countries
- Fish: 3.44m t/yr total vs 457kt from banned countries
- Dairy: ~36m t/yr total vs 459kt; cheese, butter, powdered milk can be imported from South America, New Zealand
- Vegetables: 16m t/yr vs 900kt; subsitutions possible from Turkey, Argentina, Chile, China, Uzbekistan, Azerbaijan
- Fruits and berries: 11m t/yr vs 1.6m t; apples, pears can be imported from Argentina, Chile, China, Serbia; cherry, apricots, peaches from Uzbekistan, Azerbaijan, Armenia, Israel, Turkey, Iran; citrus from Egypt, Morocco, Turkey, South Africa
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Seems like once again, US sanctions have forced retaliation from Russia that economically impacts the US (and European) economies - just like Jack Lew said it would not...
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And tonight:
- *RUSSIA BAN ON U.S. BEEF SEEN POSITIVE FOR BRAZIL EXPORTS: ABIEC
- *RUSSIA ALLOWS BEEF IMPORTS FROM 27 BRAZIL PLANTS: ABIEC
Turkish list of food suppliers to Russia to be ready soon
August 08, 18:37 UTC+4
Mutual partnership is creating highly favourable conditions for the Turkish economy, ensuring stability of food manufacturing, the Russian veterinary watchdog said
Mutual partnership is creating highly favourable conditions for the Turkish economy, ensuring stability of food manufacturing, the Russian veterinary watchdog said
After talks between Rossekhoznadzor head Sergei Dankvert with Nihat Pakdil, Deputy Undersecretary of Turkey’s Ministry of Food, Agriculture and Livestock (MFAL), the agency said that it might include these enterprises in the corresponding register under guarantees of the Turkish veterinary service.
This measure should considerably and quickly boost food supplies from Turkey, Rosselkhoznadzor said. Russia is interested not only in Turkish fruit and vegetables, but also in fish and seafood, as well as meat and dairy products.
Mutual partnership is creating highly favourable conditions for the Turkish economy, ensuring stability of food manufacturing, the Russian veterinary watchdog said. “Irrespective of the tourist season demand in Turkey, the manufactured products will be sold on the Russian market,” the agency said in a press release.
Russia’s imports of Turkish food products in 2013 accounted for $1.755 billion. Russia’s food exports (mainly grain) to Turkey accounted for $1.721 billion.
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