0
Please log in or register to do it.

China’s suspension of transactions with sanctioned Russian banks marks a significant blow to Russia’s economy, according to reports. The Russia division of the Bank of China, along with other Chinese banks like ICBC and China CITIC Bank, ceased processing payments in yuan (RMB) due to U.S. secondary sanctions linked to Russia’s invasion of Ukraine.

This move complicates Russia’s financial dealings, increasing both the time and cost of processing payments. Additionally, it pushes sanctioned Russian sectors towards non-banking actors, raising the risks of fraud and reducing state control over transactions.



A major concern is how these developments will impact Russia’s already strained economy, which has relied heavily on Chinese trade, including oil and natural gas purchases, since being largely cut off from the global financial system in 2022. Experts suggest that China’s yuan transactions with Russia have also been an experiment to reduce reliance on the U.S. dollar.

The Bank of China, the second-largest Chinese lender in Russia by assets, has halted payments starting June 24. This action follows the U.S. expanding its sanctions list to include 300 organizations and individuals, some of which are in China and Hong Kong, for allegedly aiding Russia’s military efforts.

The Chinese Foreign Ministry criticized the U.S. for its hypocrisy in supplying Ukraine with weapons while blaming China for undermining peace. Despite these tensions, China-Russia trade has surged by 121% since 2021, underscoring China’s role as Russia’s economic lifeline.

The suspension of payments is expected to extend beyond the banking sector, reducing state control and increasing the risk of fraud. While some Chinese experts downplay the impact, others view these sanctions as a significant shift that could lead to a major retreat of non-Western banks from Russian business dealings.

In summary, China’s decision to halt transactions with Russian banks highlights the ongoing economic challenges for Russia amidst international sanctions, further straining its financial stability and deepening its reliance on China.

Ripple vs. SEC: Critical Deadline Approaches as XRP Case Intensifies
Former Top Chinese Banker Receives Suspended Death Sentence

Reactions

0
0
0
0
0
0
Already reacted for this post.

Reactions

Your email address will not be published. Required fields are marked *