The Shanghai subsidiary of VTB and small border Chinese banks, through which Russia and China were going to make payments, limited the conversion of rubles into yuan. This is reported by The Moscow Times.
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These regional banks do not work with the dollar and were not afraid of sanctions, so they are had high hopes. But as it turned out, they don’t need rubles either.
Therefore, they convert into yuan no more than what goes to them in the accounts of Russian exporting clients for transfer to Russia.
These flows do not balanced: Russian exporters are mostly large and use the services of other banks. Therefore, there are not enough “Russian” yuan for everyone, and importers have to wait a long time for the conversion window to pay for the goods.
After VTB Shanghai fell under blocking US sanctions, its ability to convert rubles into yuan has sharply decreased. Significantly fewer export flows pass through small border banks than imports, creating a queue to receive yuan in China.
- Currency Sanctions Banks