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Alrosa Taking Diamond Payments in Rubles

Process is potentially faster and simpler than dollar transactions, Russian miner says.
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 
Tags: Alrosa, China, dollars, Evgeny Agureev, India, Rapaport News, Rubles, Russian rubles, VTB Bank
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