Weak rouble prompts more Russian interest in China, Hong Kong

The weak rouble has prompted more Russian banks and companies to explore opportunities in mainland China and Hong Kong while co-operation at the state level continues to strengthen.

The rouble dived to 67.91 per US dollar on December 16 from 44.84 on November 24, before recovering to 53.50 last Friday.

"As the rouble [loses value], we see most major Russian banks quickly seeking partnerships with Hong Kong banks. They are looking to establish correspondent accounts with Hong Kong banks … as well as showing interest in setting up financial funds in Hong Kong or Singapore," said Ashley Dudarenok, the managing director of Alarice International, a Hong Kong consultancy.

"When the rouble was falling, we didn't see much [Russian] money converting into [yuan] as Russian businesses were waiting to see what would come. Now the rouble has recovered a bit, we see more interest to act quickly."

Starting today, China will launch swaps and forwards between the yuan and the Russian, Malaysian and New Zealand currencies, offering a hedging tool against these currencies, according to a statement from the China Foreign Exchange Trade System, a unit of the People's Bank of China.

This month, the International Centre for Development of Innovation (ICDI) saw more Russian company representatives visiting Hong Kong.

"They are seeking business partners and considering setting up regional offices in Hong Kong for greater China," said Elena Trofimova, the chief executive of ICDI, which is partly owned by state-owned Russian Venture.