The People's Bank of China (PBC) authorised Suifenhe City in Heilongjiang Province as a pilot zone where the ruble can be officially used alongside the yuan instead of US dollar.
Jin Mei, deputy secretary-general of the monetary policy committee of the central bank, made the announcement yesterday at the opening ceremony of a trade exposition in Suifenhe, state-run Xinhua news agency reported.
Suifeihe City is the major hub of Heilongjiang Province's trade with Russia.
The city accounted for 80 per cent of Heilongjiang's export of goods to Russia and reported a foreign trade of USD 7.59 billion in 2014.
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Ruble is already widely used in Suifenhe, particularly in shops and hotels targeting Russian customers, local sources said.
City officials believe that legalising the use of ruble will promote bilateral economic cooperation and boost tourism.
China and Russia signed a currency swap agreement in 2014 as a foundation for financial cooperation between the two nations as the two countries are getting closer in the backdrop of US and EU sanctions against Moscow over the Ukraine crisis.
Cross-border yuan-dominated payments between China and Russia reached 8.22 billion yuan (USD 1.32 billion) in the first half of 2015, a 112-per cent year-on-year increase, Jin said.