With Russian President Vladimir Putin anticipated to meet his Chinese counterpart Xi Jinping at a regional summit this week, closer financial cooperation may be on the cards, including the possibility of Russia issuing yuan-denominated government bonds, reported Nikkei Asia.
What Happened: As yuan-denominated trade with China is gaining pace in the shadow of Western sanctions imposed on Moscow over the Ukraine war, more Russian companies are issuing bonds in the Chinese currency.
State-owned Rosneft Oil RNFTF conducted a public offering of 10 billion yuan ($1.44 billion) in bonds on Tuesday, the report stated, citing Russian media.
In July, leading global aluminum producer RUSAL announced its first yuan bond placement in Russia. The demand for the bonds exceeded the offer by more than two times, it said in a press statement. Alexei Grenkov, Head of Corporate Finance of RUSAL said the company sees significant demand for such financial instruments, both from Russian banks and private investors, for whom the transition to the yuan is a good alternative to traditional foreign exchange investments.
In late August, Russia's largest gold miner, Polyus OPYGY, did a 4.6 billion yuan offering, the report added.
Why It's Important: Due to western sanctions, many of Russia's largest banks have been excluded from SWIFT, triggering moves to join China's alternative network. Over 20 Russian financial institutions were connected to the Cross-Border Interbank Payment System (CIPS) as of mid-July, the report said, citing Russian media.
Read next: Russia Becomes 3rd Largest Market For Yuan Transactions Outside China Amid Western Sanctions
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