By Matthew Miller
BEIJING (Reuters) - China and Russia could reach an accord by the year-end on counterparties, common depositories, clearing centres, and financial reporting standards needed for Russia to issue yuan denominated bonds, Russia's Deputy Finance Minister Alexei Moiseev said.
Russia said last year it was hoping to issue no less than $1 billion worth of the so-called OFZ bonds, which are the main treasury bonds used to finance government borrowing on the domestic market, in yuan in 2016.
After meeting with China's Ministry of Finance in Beijing on Thursday, Moiseev said discussions were "progressing well". In February, the Russian side had described talks with Chinese regulators as difficult.
"Hopefully we can commit to signing documents towards the end of the year," Moiseev told Reuters in an interview on Thursday.
The timing would leave Russia little room to launch yuan denominated debt before the end of the year.
"We need to do a lot of work," Moiseev said. "The question of reporting standards have to be synchronized, the audit standards have to be synchronized. The Chinese and Russian regulators have to be confident in their supervision of the local central depositories."
Sergei Shvetsov, Deputy Governor of the Bank of Governor, was due to hold talks with China's central bank on Friday.
Russian President Vladimir Putin has been moving to develop closer ties with China.
In November, according to media reports, the Central Bank of Russia included the Chinese yuan in its currency reserve basket, part of a move to boost the yuan's presence in Russian financial markets.
Last May, the Moscow and Beijing governments also signed a tax treaty.
Chinese banks are increasingly supporting Russian companies, including gas producer Gazprom (MCX:GAZP), with loans, a trend that Moiseev saw continuing.
"We've generally had a very productive partnership with Chinese banks, they've been investing in some of the key infrastructure projects in Russia, and we are very satisfied that is happening," he said.