Monday, December 4, 2017

De-dollarization continuing beyond BRICS gold trade scheme as Russia's markets to soon sell Yuan denominated bonds

Last week the BRICS coalition announced a plan to conduct direct bi-lateral trading of physical gold, with the expectation that this scheme would eventually lead to gold backed trade in products, services, and commodities.  Now on Dec. 4 it appears that Russia is taking de-dollarization to the next level by preparing to open up its markets to sell Russian bonds that will be denominated in the Yuan currency.

The Moscow stock exchange will soon issue nearly $1 billion-worth of yuan-denominated bonds. It could become the start of a new financial system not based on the US dollar, analysts say. 
Russia will issue the 6 billion yuan (about $900 million) bonds with a five-year maturity in December or January. The Central Bank says it is testing the water for future investments. 
“Such steps will make it possible to remove the dollar from mutual settlements and use only yuan and rubles (mostly yuan for the moment) in the mid-term, if more specialists from the Russian financial sector work in this direction,” Gleb Zadoya, Head of Analytics at Analitika Online told RT. 
Russian bonds in yuan could be interesting for the Chinese, as China has trillions of dollars of excessive liquidity, as well as hundreds of thousands of new investors who are interested in trying new markets, the analyst said. 
For Russia, facing a new round of US sanctions aimed at its bond market, it is a great opportunity to get closer to China, according to Zadoya. 
Petr Pushkarev, Chief Analyst at TeleTrade, says investing in Russian yuan bonds is a great opportunity for Chinese investors to diversify their dollar-dominated portfolios. – Russia Today

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