Russia to extend RMB trading due to strong demand

Russia’s Micex Stock Exchange, so far the only place outside of China to offer direct trading in renminbi, plans to extend dealing hours as increased exports spur demand for the currency, Bloomberg reported. Banks in Russia have been buying and selling renminbi for rubles since December 15. Transactions came to US$738,185 on the first day of trading, beating Micex’s estimate by 64%. Chinese exports to Russia rose 74% year-on-year in November and bilateral trade was up 53% at US$47.5 billion for the first 10 months of 2010. Exporters can reduce transaction costs by as much as 5% by using the local currency of their trading partner rather than US dollars, according to the deputy chairman of Russia’s central bank. Oleg Radichkin, HSBC’s (HBC.NYSE, HSBA.LSE, HSB.Euronext, 0005.HK) head of development and sales of bank products in Moscow, predicts that up to 30% of all Russian trade with China will be conducted in renminbi within five years.