Russian Firms Rush To Open Accounts At Chinese Banks

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Assessment: China has repeatedly voiced opposition to the sanctions, calling them ineffective and insisting it will maintain normal economic and trade exchanges with Russia …

As US and European sanctions make life increasingly difficult for Russian businesses, one Chinese bank claims it has seen a surge in requests from Russian firms trying to open new bank accounts, according to an anonymous source quoted by Reuters.

It’s the latest example of a phenomenon first described by Credit Suisse’s Zoltan Poszar, who warned during a recent interview with Bloomberg that sanctions against Russia- along with the ban of most Russian banks from SWIFT –  could lead to greater reliance on the Chinese yuan by Russian companies. As we said, China’s yuan, which presently accounts for just 2.7% of world reserves, is one option for anxious reserve managers in Moscow or elsewhere.

“Then the sixth angel poured out his bowl on the great river Euphrates, and its water was dried up, so that the way of the kings from the east might be prepared” Rev. 16:12.

“Over the past few days, 200-300 companies have approached us, wanting to open new accounts,” the person, who works at the Moscow branch of a Chinese state bank and has direct knowledge of its operations, told Reuters.

The source added that most of the firms looking to open an account with their bank do a lot of business with China.

He declined to be named or have his bank identified as he is not authorized to speak with media.

It was not clear how widespread Russian demand for new accounts at Chinese banks was, but the banker source told Reuters many of the companies seeking new accounts do business with China and that he expected yuan transactions by such firms to increase.

Still, it’s a sign that Russian Central Bank will likely need to keep more reserves denominated in the Chinese yuan.

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