Kostin Says VTB Is Providing Loans in China in Yuan and RublesJason Corcoran
Andrey Kostin, chief executive officer of VTB Group, told Russian president Vladimir Putin its Shanghai branch has been providing loans in yuan and rubles since May in a bid to challenge the dollar’s status as the global reserve currency.
“We believe that this problem is very important, at least in the volume of our bilateral trade with China and, of course, the expansion of settlement in rubles and yuan,” according to Kostin comments published today on the Kremlin website.
Russia has sought to diversify its reserves and to promote regional currencies in trade and finance to reduce the risks posed by the dominance of the dollar. Dmitry Medvedev, the Russian prime minister, blamed the global financial crisis in 2008 on an over-reliance on the U.S. currency and the U.S. role in the financial system.
China is trying to squeeze out U.S. and European lenders as a key source of funding for some of Russia’s largest companies. Most of the $27 billion Russia needs to complete its Yamal LNG project in the Arctic will come from state-run Chinese lenders instead of European and U.S. banks because of the threat of further sanctions over Ukraine, billionaire Gennady Timchenko told reporters in St. Petersburg on May 26. Putin last week concluded a $400 billion deal to supply natural gas to China.
State-run VTB, led by former diplomat Kostin, is Russia’s second-biggest bank after OAO Sberbank.