HSBC Russia has started issuing letters of credit (L/Cs) in Chinese yuan as the two countries seek to strengthen bilateral relations.

The first company to use the new service was Ostin, a subsidiary of the Sportmaster group of companies.

Customer advantages

According to the bank, issuing L/Cs in yuan allows its clients to agree more favourable payment terms with their Chinese suppliers.

HSBC says it sees an increasing demand for yuan-denominated L/Cs as a method of payment under international contracts.

Bilateral ties

The new service fits with recent moves by Russia and China to improve trade and economic relations.

Last year saw the launch of yuan-ruble trading on Moscow's stock exchange, a move that was seen as Russia recognising the yuan as a global currency.

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