Sanctions Against Moscow Exchange: Russians Cannot Withdraw Yuan From Accounts
7- 25.06.2024, 7:55
- 12,838
Following the dollars and euros.
Clients of the sanctioned Moscow Exchange are experiencing difficulties in withdrawing Chinese yuan from their accounts, following dollars and euros, part of which was blocked by the trading floor, The Moscow Times writes.
Problems with the yuan were reported late last week by the brokerage company of Sinara, whose clients received a notice that it was temporarily impossible to withdraw Chinese currency from the exchange. Citing sanctions against the exchange by the National Clearing Centre, the broker also halted yuan trading for clients.
On Monday, June 24, the presence of problems with the Chinese currency was confirmed in Sberbank CIB - the investment "daughter" of the largest Russian state bank. The company's analysts reported in their morning review that "difficulties with the yuan withdrawal" became one of the reasons for the ruble strengthening against the Chinese currency: the yuan exchange rate on Monday fell by 2.5% to 11.73 rubles, despite the Central Bank's decision to reduce the limit of mandatory foreign currency sales for exporters from 80% to 60%.
Problems with the yuan have resulted in "no sustained high demand for the currency", Sberbank CIB said. At the same time, the difficulties may be exacerbated by the decision of the Russian subsidiary of Bank of China to stop working with sanctioned Russian banks, analysts warn.
According to Kommersant, Bank of China, which operates in the Russian market, stopped processing payments in yuan following the dollar and euro, transactions in which it stopped immediately after the sanctions were imposed on the exchange. The bank - the second largest in terms of assets among Chinese credit organisations in Russia - "played a significant role" in the bank's payment traffic, and its decision was linked to the threat of secondary US sanctions, market sources told Kommersant.
"Under these conditions, the demand for the currency may decrease, and some market participants will want to sell it, fearing problems with access to yuan," analysts at Sber CIB wrote. They predict further growth of the Chinese currency to the mark of 11.7 rubles per yuan.
On Friday, the Moscow Exchange denied problems with the withdrawal of Chinese yuan, insisting that all transactions in the currency of the People's Republic of China are taking place "as usual". Hours later, the exchange admitted that client balances in dollars and euros had been blocked on its accounts.
This is about the currency security, which brokers kept on accounts in the National Clearing Centre, a subsidiary of the exchange (NCC is responsible for the registration of transactions on its markets). The "frozen" currency will be returned to clients in rubles by June 28, the exchange promised.
On June 12, Moscow Exchange was blacklisted with its key settlement structures - NCC and National Settlement Depository (NSD) - by the U.S. Ministry of Finance. The next day, trading in the US dollar, euro and Hong Kong dollar stopped at the exchange, and the Central Bank began setting official rates for over-the-counter market transactions.
De facto, the Chinese yuan remained the only foreign currency available for trading. But yuan trading may soon be stopped, a source close to the Central Bank told Bloomberg. According to him, Chinese banks that provide such transactions are likely to phase out operations with the exchange due to the threat of secondary U.S. sanctions.
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