Interview: ICBC Moscow president calls designation of clearing bank in Russia big step in RMB's internationalization

The designation of an RMB clearing bank in Russia is a big step in China's drive to boost international use of the Chinese currency, the head of a Chinese bank's Moscow subsidiary has said.

"The world economy is experiencing a process of de-dollarization, as the major powers, like China and Russia, are pushing forward the settlement by local currencies," Li Wencong, president of the Moscow subsidiary of the Industrial and Commercial Bank of China (ICBC), the world's largest bank by assets and market cap, told Xinhua in a recent interview.

"The designation of the RMB clearing bank in Russia will mark a big step in the settlement of the RMB and rubles," he said.

Last Friday, the People's Bank of China (PBOC), China's central bank, authorized the ICBC Moscow subsidiary to be a yuan clearing bank in Russia.

The ICBC is also the largest lender in China, and its Moscow branch is the biggest Chinese bank in Russia.

Li added that by including the RMB into the Special Drawing Rights (SDR) currency basket by the International Monetary Fund (IMF), as well as the designation of clearing banks in Russia and the United States, it already means that the Chinese currency has won worldwide recognition.

China is seeking wider use of its currency in global trade and investment. Last week, the PBOC also appointed the Bank of China as the RMB clearing bank in the United States.

For both enterprises and the public, Li said, the RMB is basically used as a payment and settlement tool, rather than an investment tool, in the international market.

The highest level of the RMB is being as a reserve currency for countries or big institutions, he noted.

Li voiced his belief that with the internationalization of the RMB, the Chinese currency's business scope in Russia will be expanded.

According to him, the RMB has become gradually popular among Russian blue-chip companies and the government, which have began considering issuing yuan bonds.

The ICBC's Moscow subsidiary is planning an RMB-rubles currency swap program and issuing currency rate derivatives, so as to make enterprises better manage and hedge the currency risk, Li said.

China-Russia merchandise trade grew 7.8 percent in the first eight months of 2016, sharply rebounding from a 27.8-percent decline for the whole of 2015, according to customs data.

Amid close economic ties between the two neighbors, the Russian central bank included the RMB in its foreign exchange reserves at the end of 2015. Endi