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Ruble-yuan conversion plan as Russia-China plan bridge to Crimea

June 19, 2014, 14:03 UTC+3 SHANGHAI
Russia's idea for financing the $8.2 billion project has been backed by China to avoid currency risk associated with conversions into US dollars
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A ferry in the Kerch Strait

A ferry in the Kerch Strait

© ITAR-TASS/Alexander Ryumin

SHANGHAI, June 19. /ITAR-TASS/. Construction of a bridge linking Russia's mainland and Crimea may channel payments to protect partners through Chinese yuan and Russian rouble currency conversions.

Russia's idea for financing the $8.2 billion project has been backed by China to avoid currency risk associated with conversions into US dollars.

Plans for two-way payments between Russian Highways (Avtodor) and China Communication Construction Corpopration (CCCC) were announced by Avtodor head Sergei Kelbakh, who spoke to journalists at an international transport exhibition in Shanghai, China.

“Our partners from China are ready to make ruble payments on the Russian territory, take on long-term liabilities and work in a consortium with Russian companies, in particular once the bridge is commissioned,” Kelbakh said.

“All projects with foreign participation face currency risks, especially in the long term,” said Avtodor’s head. Conversion into rubles and back into yuan could be conducted by major Russian banks and their Chinese branches, Kelbakh said, adding that CCCC had confirmed it could finance the project.

The 280 billion-ruble transport link across the Kerch Strait will connect Crimea with southern Russia's Krasnador region. Non-budgetary resources are expected to finance $2.3 billion (80 billion rubles) of the project's cost.

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