One of China's largest state-owned banks exits Moscow Exchange

Bank of China, one of China's largest state-owned banks, has ceased cooperation with the Moscow Exchange after it was hit by US sanctions. 

Source: The Moscow Times

Details: Previously, the subsidiary of the Chinese credit institution, Bank of China JSC, acted as a yuan clearing bank, ensuring that all transactions in Chinese currency were conducted on the stock exchange market.

Currently, ICBC Bank, China's second state-owned bank, clears transactions in yuan. Still, its operations may also be suspended: the US Treasury's licence to conduct transactions with the sanctioned exchange is valid only until mid-August.

When it expires, Chinese banks will face sanctions, and exchange trading in yuan in Russia may halt.

Background:

• Direct payments in yuan are increasingly being frozen or delayed after the US expanded the criteria for imposing sanctions in June.
• The Shanghai-based subsidiary of VTB (Russian state-run bank) and small Chinese border banks, through which Russia and China were going to make payments without further delay, have restricted the conversion of roubles into yuan.
• On 24 June, the Russian subsidiary of the Bank of China suspended all transactions with Russian banks due to US sanctions.

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