Bank of China has decided to officially stop cooperation with the Moscow Stock Exchange against the backdrop of new American sanctions.
Points of attention
- The activities of Chinese banks in Russia are blocked against the backdrop of powerful US sanctions.
- ICBC Bank is China's second largest state-owned bank, which may also soon end cooperation with the Russian Federation.
- Some Chinese banks have already limited the conversion of rubles into yuan against the backdrop of US sanctions.
The Moscow stock exchange felt a new blow from US sanctions
This is reported by the pro-Kremlin media outlet "Kommersant" with reference to its insiders.
What is important to understand is that Bank of China is one of the largest state-owned banks in China.
Previously, the "daughter" of the Chinese credit organization — JSC "Bank of China" — performed the functions of a clearing bank for the yuan, ensuring all operations in the Chinese currency on the exchange market.
As of today, the trading of yuan — de facto the last currency on the Russian stock market — has turned out to be dependent on a single Chinese bank — ICBC Bank.
It is worth paying attention to the fact that ICBC Bank is the second largest state-owned bank in China, however, its activities in the aggressor country can be blocked.
This may happen primarily due to the fact that the license of the US Ministry of Finance, which makes it possible to conduct operations with the sanctioned Moscow Exchange, will be valid only for the next 3 weeks.
When it expires, Chinese banks will face sanctions, and exchange trading of the yuan in Russia may stop.
Banks of the People's Republic of China have limited the sale of yuan to companies from Russia
On July 12, it became known that the Shanghai subsidiary of VTB and small border Chinese banks, through which Moscow and Beijing intended to make payments without undue delay, limited the conversion of rubles into yuan.
As journalists managed to find out, regional banks are ready to serve trade with the Russian Federation, because they are not afraid of US sanctions: they do not work with dollars.
However, what is important to understand is that they do not need rubles either.
Taking this into account, they convert rubles into yuan no more than is received by them on the accounts of Russian exporting clients for transfer to Russia.
However, the new US sanctions sharply reduced VTB Shanghai's ability to convert rubles into yuan.
