(Adds quotes and details)
BEIJING, March 16 (Reuters) - Russia has created the necessary market infrastructure for the issuance of its first yuan-denominated OFZ bonds, the deputy governor of Russia’s central bank told Reuters in Beijing on Thursday.
Russia has sought stronger ties to China since relations with the West soured over the Ukraine conflict in 2014. The country’s economy has also been hurt by a slide in global prices for crude oil, its key exports.
“Technically, we are ready for the issue,” said Dmitry Skobelkin in an interview ahead of the opening of the central bank’s representative office in Beijing on Thursday.
The tenor of the bond has not been announced nor has the timing of the issuance, which will be decided by the Ministry of Finance, he said.
The Beijing office is the first opened by Bank of Russia outside the country and will provide front-line coordination between Moscow and Beijing on various financial issues, Skobelkin said, including implementation of five memorandums of understanding signed between the two countries last year.
China’s central bank deputy governor, Yi Gang, at a ceremony launching the office, said that Sino-Russia cooperation on economic, trade and investment issues had reached a “historic high”.
One measure of that progress will be the opening of a yuan clearing center in Moscow on March 22, Skobelkin added.
Currency swap agreements between the two countries have been in place since 2014, he said, and so far 815 billion roubles and 150 billion yuan have been utilized.
“We’ve tested it and utilize it from time to time,” said Skobelkin.
In September Chinese bank ICBC was appointed a clearing bank for settling yuan transactions in Russia.
Russia is planning to raise the equivalent of $1 billion by issuing its first-ever OFZ bonds in Russia denominated in Chinese yuan, which is “a priority project” for Russia.
Bank of Russia and the People’s Bank of China are working on memorandum of understanding (MOU) on gold trading, in order to solve technical problems for China to import Russian gold, said Vladimir Shapovalov, an official with the Russia’s central bank.
Last December, the Moscow Exchange signed MOU with Chinese brokerages CITIC Securities and Galaxy Securities, paving access for their clients to Russian securities traded in Moscow.
Reporting by Matthew Miller and Zhang Shu; Writing by Nick Heath and Stella Qiu; Editing by Randy Fabi