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Indian companies swapping dollar for Asian currencies to buy Russian coal
Reuters previously reported on a large Indian coal deal involving the Chinese yuan, but the customs data underline how non-dollar settlements are becoming commonplace.
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Coal boom: Coal barges queue to be pulled along Mahakam River in Samarinda, East Kalimantan on Aug. 31, 2019. Primary commodity boom like coal has helped Indonesia’s exports grow in the third quarter of this year. (Reuters/Willy Kurniawan)
I
ndian companies are using Asian currencies more often to pay for Russian coal imports, according to customs documents and industry sources, avoiding the US dollar and cutting the risk of breaching Western sanctions against Moscow.
Reuters previously reported on a large Indian coal deal involving the Chinese yuan, but the customs data underline how non-dollar settlements are becoming commonplace.
India has aggressively stepped up purchases of Russian oil and coal since the war in Ukraine began, helping to cushion Moscow from the effects of sanctions and allowing New Delhi to secure raw materials at discounts compared to supplies from other countries.
Russia became India's third-largest coal supplier in July, with imports rising by over a fifth compared with June to a record 2.06 million tonnes.
In June, Indian buyers paid for at least 742,000 tonnes of Russian coal using currencies other than the US dollar, according to a summary of deals compiled by a trade source based in India using customs documents and shared with Reuters, equal to 44 percent of the 1.7 million of tonnes of Russian imports that month.
Indian steelmakers and cement manufacturers have bought Russian coal using the United Arab Emirates dirham, Hong Kong dollar, yuan and euro in recent weeks, according to customs documents separately reviewed by Reuters.
The yuan accounted for 31 percent of the non-US dollar payments for Russian coal in June and the Hong Kong dollar for 28 percent. The euro made up under a quarter and the Emirati dirham around one-sixth, the data from the trade source showed.
