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Caixin

Yuan bonds debut in Russia as challenge to dollar dominance builds

Firms increasing use of Chinese currency to side-step Ukraine war-related sanctions

The yuan is increasingly being seen as an alternative currency as Russian companies seek to cut their dependence on the U.S. dollar as Western sanctions put a squeeze on their operations.

Sweeping sanctions imposed by Western countries on Moscow after its attack on Ukraine are prompting Russian companies to turn to China and the yuan to cut their dependence on the U.S. dollar and find alternative currencies to use for business and investment.

Aluminum producer United Co. Rusal International PJSC, which is listed in Hong Kong and Moscow, raised 4 billion yuan ($590 million) from the sale of the first-ever yuan-denominated bonds in Russia. The debt, which started trading on the Moscow Exchange Wednesday, was snapped up by local investors, according to Gazprombank, the lead manager of the placement, which said it received some 100 orders from banks, asset managers, investment and insurance companies, and individuals.

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