Credit Bank of Moscow (CBM) has signed a multicurrency loan agreement with one of Russia's largest clothing retailers, O'stin, and announced that it can now open renminbi denominated letters of credit (L/Cs) for its purchases from Chinese suppliers.

The loan agreement is for 2 billion roubles (US$30 million) and specifically aims to help the Russian retailer purchase from Chinese suppliers.

Chinese funding

Financing for the facility is provided from funds raised by CBM as a result of a syndicated loan deal with large regional banks in China.

CBM has become the first private Russian bank to receive a syndicated loan from Chinese financial institutions. Funds are allocated to companies participating in Sino-Russian trades.

Renminbi L/Cs

Commenting on the bank's ability to open renminbi L/Cs, head of CBM's documentary and international business sales department, Natalya Bakhova, says trade turnover between China and Russia in 2019 amounted to US$111 billion.

China's share of foreign trade turnover with Russia amounted to 16.64 per cent in the same year compared with 15.73 per cent in 2018.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.