Russia and India will start trade in domestic currencies within the next three years, said the Chairman of Russian Development Bank.

Vladimir Dmitriev, chief of Vnesheconombank, was speaking to reporters on the sidelines of the BRICS summit being held in New Delhi on Thursday.  With China it took us three years to (evolve) from initial conversations to trading in local currencies,” he said. I think we will meet similar terms with India, he added.

These discussions are part of the initiatives taken up by member countries to improve financial cooperation among them. As part of this objective, BRICS countries will sign local currency lending deals for promoting trade and investment further among member nations.

Under the agreements, each member nation will make its own currency loans available to the other four member countries. Using our own currencies to issue loans and settle payments can minimize exposure to exchange rate fluctuations, reduce our reliance on third-party currencies, and facilitate trade and investment, Chen Yuan, the Chairman of China Development Bank, commented on the developments.

Trade among BRICS countries has progressed admirably to reach $230 billion in 2010. It is expected that the two currency related agreements, namely, the Master Agreement for Extending Credit Facilities in Local Currency and the Multilateral Letter of Credit Confirmation Facility Agreement will make sure that financial cooperation are further strengthened among member nations.

The two agreements will for sure assist us in promoting our bilateral trade and investment and improve the trade facilities which we are extending to each other, Dmitriev said.