UPDATE 3-Russian central bank started buying Chinese yuan assets last year

Mon Jul 4, 2016 11:43am EDT
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By Alexander Winning and Oksana Kobzeva

MOSCOW, July 4 (Reuters) - Russia's central bank started buying Chinese yuan-denominated assets in the fourth quarter of last year as part of its drive to diversify its foreign-currency reserves and make it less vulnerable to Western sanctions.

At the end of September last year the yuan had not figured in the central bank's foreign currency assets, but the bank said on Monday the yuan accounted for 0.1 percent of its forex assets by the end of 2015.

Russia now joins a small group of countries, most of them in Asia, whose central banks have purchased the Chinese currency for reserves.

Moscow and Beijing are political allies who have drawn closer since Western nations imposed sanctions on Russia over its 2014 annexation of Ukraine's Crimea region. Russian leader Vladimir Putin visited Beijing on June 25.

A Russian central bank spokeswoman said yuan assets did not yet count as part of Russia's official gold and forex reserves, since the International Monetary Fund has not yet given the yuan reserve asset status.

But it is set to get that status in October this year, in what is seen as an important milestone for China's recognition as a global economic power.

The share of the U.S. dollar in the central bank's foreign-currency assets was unchanged over the fourth quarter at 47.5 percent.   Continued...