Russia to Open Yuan Clearing Center in Moscow

(Beijing) — Russia will open a yuan clearing center in Moscow on Wednesday, while the Russian Ministry of Finance plans to launch $1 billion worth of yuan bonds, according to Russia’s central bank.

The bond issuance will take place “ideally in one or two months,” Dmitry Skobelkin, vice president of Russia’s central bank said Thursday at an opening ceremony of the central bank’s first overseas liaison office, which is located in Beijing.

The Beijing liaison office will help protect Russian financial institutions’ rights in China, and at the same time, enhance the attractiveness of the Russian financial market to Chinese financial institutions, Skobelkin told Caixin.

Yi Gang, vice president of the People’s Bank of China, or China’s central bank, touted the moves as a sign that Sino-Russian ties and financial cooperation had reached a new level.

“China and Russia’s trade volume in 2016 reached $59.5 billion. I’m glad that the two countries’ financial cooperation has also reached a new stage,” Yi said at the ceremony.

China and Russia signed a series of documents in 2016 on the expansion of financial cooperation, including memorandums of understanding on anti-money laundering and fundraising for terrorism, establishment of a yuan clearing center, and agreements concerning the Russian state bank’s payment system and China’s UnionPay system.

In October 2014, the People’s Bank of China signed a three-year deal with the Central Bank of Russia for a currency swap worth 150 billion yuan, in a bid to enhance trade and boost the internationalization of both countries’ currencies.

When asked whether sanctions levied by Western countries against Russia have affected China and Russia’s currency clearing and settlement agreement, Skobelkin said there was no major impact.

The Moscow clearing bank is the 22nd overseas clearing center approved by China’s central bank as of September last year. The first yuan clearing bank in the U.S., approved two days before the Moscow center, will be based in New York. Other clearing centers are in Paris, London, Frankfurt, Hong Kong and Singapore.

Contact reporter Wu Gang (gangwu@caixin.com)