Russia's Sberbank has announced that it has issued the country's first yuan-denominated letters of credit (L/Cs).

The announcement coincides with increasingly closer trade and economic ties between China and Russia.

L/C instructions

Sberbank says the L/Cs were issued on the instruction of a major corporate client.

"This is a complex transition in which the L/Cs in Chinese yuan have been opened on behalf of one of our most major corporate clients," according to a statement issued by Sberbank.

Closer ties

Ties between Moscow and Beijing are tightening as the Ukraine crisis sours Russian relations with the US and Europe.

Beijing and Moscow recently entered into a US$24.5 billion currency swap deal and Russia is reportedly mulling the possibility of selling gas to China on yuan-denominated terms.

Rouble-yuan currency trades on the Moscow Exchange reached a record high in October of about US$1.8 billion, around 80 per cent higher than in the same month last year.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.