China offers Russia help with currency swap suggestion

China offers Russia help with currency swap suggestion

Two Chinese ministers offered support for Russia as President Vladimir Putin seeks to shore up the ruble without depleting foreign-exchange reserves.

China will provide help if needed and is confident Russia can overcome its economic difficulties, Foreign Minister Wang Yi was cited as saying in Bangkok in a Dec. 20 report by Hong Kong-based Phoenix TV. Commerce Minister Gao Hucheng said expanding a currency swap between the two nations and making increased use of yuan for bilateral trade would have the greatest impact in aiding Russia, according to the broadcaster.

While the offer won’t relieve the main sources of pressure on the ruble — capital outflow tied to plunging oil prices and sanctions linked to Russia’s annexation of Crimea from Ukraine – – the currency gained 3.1 percent against the dollar by 12:37 p.m. in Moscow. The Micex Index (INDEXCF) was little changed, and the yield on Russia’s 10-year bond fell 30 basis points to 13.3 percent, according to data compiled by Bloomberg.

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