Moscow Exchange (MOEX), one of the largest multilateral trading platforms for RUB-denominated FX instruments, has signed a memorandum of understanding (MoU) with the China Foreign Exchange Trade System (CFETS).
The new deal centers on the RMB/RUB currency pair across the two platforms. In particular, the MoU will aim to facilitate collaboration and to unify the liquidity pools for trading with this pair.
The two parties are ideal counterparts to achieve this aim, with MOEX specializing in platforms for currencies, money market instruments, equities, bonds, and other instruments in Russia.
The MoU itself was tendered by members of both parties. This includes Zhang Cuiwei, Executive Vice President of CFETS, and Igor Marich, Member of the Executive Board of Moscow Exchange.
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“Collaboration between MOEX and the CFETS, the leading FX platforms in Russia and China, respectively, is intended to improve pricing in RMB/RUB instruments and stimulate settlement in RMB and RUB. Better links between the countries’ financial institutions should help to facilitate more cross-border investments,” explained Marich.
The MoU follows on the heels of an existing joint working group that was previously installed to help conduct research.
MOEX and the CFETS had already been working to continue exploring feasible mechanisms to unify RMB/RUB trading and matching. The working group will also push towards an optimal unification model.
More specifically, this includes the roles of the relevant counterparties for credit, trading, and net settlement intermediation, plus the adoption of important controls and reporting for compliance with Russian and Chinese regulation.
“As part of the MoU, the two sides will also jointly explore business projects including the feasibility of a unified liquidity pool for CNY/RUB. Such efforts will further expand the opening-up of China-Russia financial markets, improve trade and investment liberalization and deepen China’s financial cooperation with countries participating in the Belt and Road Initiative,” noted Zhang Cuiwei.