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Alrosa Taking Diamond Payments in Rubles
Aug 16, 2018 9:17 AM
By Rapaport News
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RAPAPORT... Alrosa has accepted payment for rough sales in Russian rubles as part
of a pilot program, claiming it is potentially faster and simpler than dollar transactions.
With ruble payments, the money goes to branches of Russian banks outside of the country, rather than having to involve other financial institutions, the miner explained Thursday. Most international rough-diamond transactions are currently in dollars.
“The experience is positive, so we will apply it on an as-needed
basis,” reported Evgeny Agureev, director of Alrosa’s United Selling Organization.
Receiving more sales proceeds in rubles would also hedge Alrosa against currency fluctuations: The weak dollar was one of the reasons why Alrosa’s revenue and profit fell last year, as the company mainly sells diamonds in the US currency, but its costs and earnings reports are in rubles.
The purpose of Alrosa’s pilot was to establish whether and how it
could implement this alternative method of payment, Agureev added. Clients
from India and China participated in the experiment.
A Chinese buyer bought goods at an Alrosa auction of rough stones
above 10.8 carats in Hong Kong in June, and paid for them in rubles through Russian
lender VTB Bank’s Shanghai branch. In another case, a long-term Indian client
of Alrosa paid for a scheduled supply of diamonds by transferring the amount in
rubles to its account with a different Russian bank.
Image: Alrosa
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Tags:
Alrosa, China, dollars, Evgeny Agureev, India, Rapaport News, Rubles, Russian rubles, VTB Bank
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