© Reuters. FILE PHOTO: Illustration photo of a China yuan note

SHANGHAI (Reuters) - China has established a payment versus payment (PVP) system for and Russian ruble transactions in a move to reduce risks and improve the efficiency of its foreign exchange transactions.

The PVP system for yuan and ruble transactions was launched on Monday after receiving approval from China's central bank, according to a statement by the country's foreign exchange trading system.

It marks the first time a PVP system has been established for trading the yuan and foreign currencies, said the statement, which was posted on Wednesday on the website of the China Foreign Exchange Trade System (CFETS).

PVP systems allow simultaneous settlement of transactions in two different currencies.

CFETS said the system would reduce settlement risk as well as the risk of transactions taking place in different time zones, and improve foreign exchange market efficiency.

CFETS said it plans to introduce PVP systems for yuan transactions with other currencies based on China's Belt and Road initiative, and complying with the process of renminbi internationalization.

China has ambitious plans to create a New Silk Road to expand links between Asia, Africa, Europe.

Russia and Central Asia are considered top-priority oil and gas sources for China, the world's top energy consumer.