After VTB Shanghai came under US sanctions, the ability to convert rubles into yuan was greatly reduced.
The Shanghai subsidiary of the Russian VTB Bank and a small number of Chinese banks have limited the conversion of rubles to yuan. The Moscow Times wrote this on Friday, July 12.
After VTB Shanghai fell under US embargo sanctions, the ability to convert rubles into yuan was greatly reduced. Fewer export flows pass through small border banks than imports, creating a queue to receive yuan in China.
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In July, the same thing started in small border branches of rural banks.
“The bank explained to us that they see the payment, but they cannot bring it to the recipient, because they do not have enough requests from China for payment to Russia in rubles so that they can give yuan to our supplier,” said the interlocutor publication. .
VTB cannot buy yuan in China for punitive reasons, and rural banks do not want to do this, so as not to carry out a full cross-border conversion of funds into transfers from Russia, explained the head of the payment agent company. And so the Chinese bank, in essence, brings together an exporter and an importer: one sells a bank of yuan, which the other buys.
During his visit to China in May of this year, Russian dictator Vladimir Putin said that 90% of Russia’s trade with China is conducted in national currencies. But this did not eliminate many payment problems.
Because of them, Russian imports decreased in the first half of the year by 9% in financial terms, and more in physical terms: solving problems is expensive, prices for imported goods are increasing.
In June, it was reported that China and Russia had found ways to make payments between the countries despite increased US sanctions. In China’s border regions, specially authorized banks were created to allow Russian companies to open accounts for non-residents. This choice gained particular importance after the imposition of US sanctions against the VTB branch in Shanghai.
Let’s recall that Russia previously recognized the total dependence of the foreign exchange market on China. If trading in the Chinese yuan stops, the foreign exchange market in Russia will actually die.
Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.