(IDEX Online) - ALROSA, the world's leading rough diamond miner by volume, has tested a payment mechanism with foreign clients using the Russian currency.
In the experiment, transactions were conducted with clients from China and India. If necessary, the company is ready to use this payment scheme in rubles in the future, the miner said.
The Chinese company paid for the goods purchased at the auction for special-size rough diamonds (+10.8 carats) held by ALROSA in Hong Kong in June. By agreement with the winner of one of the lots, the contract provided for the payment in Russian rubles instead of US dollars. Payment was made through the VTB bank branch in Shanghai.
Besides, ALROSA's long-term client from India paid for one of the scheduled diamond supplies under the contract in Russian rubles. In this case, the buyer transferred the amount in rubles from his account in another Russian bank.
According to Evgeny Agureev, Director of USO ALROSA, payment via foreign branches of Russian banks makes it possible to speed-up and simplify the payment process, as there is no more need to use correspondent accounts with other banks.
"The practice in the international rough diamond market provides for settlements in US dollars between sellers and buyers of rough diamonds. We have tested an alternative payment scheme to understand the possibility of its implementation and nuances to be taken into consideration. The experience is positive, so we will apply it on an as-needed basis," said Agureev.
He noted that ALROSA's Supervisory Board instructed the company's management to consider the possibility of ruble payment for rough diamond sales.
Russian Foreign Minister Sergei Lavrov proposed earlier this week that countries facing US sanctions, such as Iran, Turkey and Russia, may start doing business in their national currencies, and suggested that the reign of the US dollar as the international reserve currency may be numbered. Economists generally agree, however, that given the US dollar's long-time supremacy as the currency of international trading, the idea seems somewhat far-fetched. And few companies are likely to want to hold rubles for payment due to the volatility of the Russian currency.