China and Russia are mulling a possible currency swap deal, which if agreed would be the seventh such pact signed by Beijing, a Chinese commerce ministry official said on Monday.
China's central bank and other Chinese banks are in talks with their Russian counterparts, the director of the ministry's Europe department, Sun Yongfu, told Dow Jones Newswires on the sidelines of a press conference.
China is gradually liberalising its currency, which is not yet fully convertible, while trying to expand its role overseas.
Beijing has already signed currency swap deals worth 650 billion yuan ($112.79 billion) with Argentina, Belarus, Hong Kong, Indonesia, Malaysia and South Korea.
Such arrangements ease liquidity trouble as they boost the amount of Chinese yuan that banks in the participating economies can draw on while servicing local companies that use the currency when trading.
An eventual deal with Russia would depend on the results of a trial program involving companies along the common border, the Chinese official said.
China has launched a pilot yuan trade payment program involving five cities in the country's eastern and southern commercial hubs and the 10 members of the Association of Southeast Asian Nations, as well as Hong Kong and Macau.
AFP