Jason Ma
China's yuan is the most traded foreign currency in Russia, but its availability in the heavily sanctioned country may soon dry up.
That would threaten a critical lifeline for Russian businesses, which became heavily reliant on the yuan as trade with China ramped up after President Vladimir Putin ordered the invasion of Ukraine in 2022. The war triggered Western sanctions that largely shut out Russia from the global financial system.
In June, the U.S. expanded its sanctions, forcing the Moscow Exchange and its clearing agent to halt trading in dollars and euros. A Treasury Department license that allows time for some transactions to wind down will expire on Oct. 12.
While Russia had already shifted away from Western currencies in favor of the yuan, the additional U.S. sanctions could have spillover effects on Chinese banks that engage in yuan transactions with Russia.
"The situation may change after Oct. 12," a source told Reuters. "An abrupt shortage of yuan or a complete refusal to accept payments from Russia by Chinese banks is possible."
No comments:
Post a Comment