Indian company pays for Russian coal in Chinese currency
India’s top cement producer pays for Russian coal shipment in Chinese yuan, says a Reuters report.
A customs document reviewed by Reuters revealed that UltraTech Cement was importing 157,000 tonnes of coal from Russia’s port of Vanino, priced at 172.6 million yuan, or about $25.81 million. The invoice was dated June 5.
“This decision is significant,” a forex trader told Reuters. “I have never heard of any Indian entity paying in yuan for international trade in the last 25 years of my career. It basically bypasses the USD.”
Traders familiar with the matter told Reuters that other companies had also placed orders for Russian coal with payments in yuan.
India has yet to condemn Russia’s invasion of Ukraine, and the two nations have increased their volume of trade transactions, especially in the field of energy.
The report comes as Moscow attempts to circumvent Western sanctions, which have frozen its foreign currency holdings and locked Russia out of most of the global financial system.
In March, India and Russia were in talks to revive a Cold War-era rupee payment mechanism that would allow companies from both countries to strike deals without dollars, although it did not happen. materialized.
Meanwhile, China tried to raise its yuan to challenge the dominance of the US dollar.
More recently, the People’s Bank of China announced earlier this week that it was developing a yuan reserve with the Bank for International Settlements and five other countries, including Singapore and Hong Kong. Each of the members will contribute about 15 billion yuan, or $2.2 billion.