Russia’s top banks have deepened their ties to China’s currency and financial system. Moscow-based lender Sberbank said Tuesday it has started lending out money in yuan. VTB said it is the first Russian bank to launch money transfers to China via the yuan outside the SWIFT messaging network. Loading Something is loading.
Russia’s top banks have deepened their ties to China’s currency and financial system as Western sanctions keep Moscow shut out from global networks.
Sberbank said Tuesday it has started lending out money in yuan as it looks to replace dollar and euro transactions.
“I don’t think Russia will return to such a situation of the dollar’s influence on the domestic economy,” Sberbank CEO German Gref said at Russia’s Eastern Economic Forum in Vladivostok, according to Reuters.
VTB also said Tuesday that it is the first Russian bank to launch money transfers to China via the yuan outside the SWIFT messaging network, which is the backbone of the global financial system.
Single-transaction transfers max out at roughly 20 million rubles, equivalent to $328,677, while the monthly limit is $100 million.
The bank will also begin lending in yuan and other so-called “friendly” non-Western currencies later this year.
“The new reality is leading to a massive rejection of the use of the dollar and the euro in international payments,” VTB CEO Andrei Kostin said. “The launch of the yuan transfer system will significantly simplify the work of Russian companies and individuals with Chinese partners, increasing the popularity of the yuan in our country.”
While Russia has developed its own network called the System for Transfer of Financial Messages, VTB added that there is still a need for an alternative to SWIFT outside of STFM.
Western sanctions in response to Russia’s invasion of Ukraine have taken aim at the Kremlin’s ability to bank globally by cutting off the country from SWIFT and freezing its foreign-exchange reserves held overseas.
But since the February invasion, Russia’s has embraced the yuan as a potential alternative payment method more strongly. Ruble-yuan trading volumes have soared, and Russia is now the third-biggest market for yuan transactions outside the Chinese mainland.
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