Chinese banks leave Moscow stock exchange in droves due to sanctions
3 July 2024 11:12
Major players in Chinese yuan trading – Chinese banks that continue to work with Russia – are leaving the Moscow Exchange, which has been hit by US sanctions. This was reported by "Komersant Ukrainian" with reference to Russian media.
Thus, over the past two weeks, trading in Chinese currency has seen a noticeable decline in the average transaction size: compared to May, this figure fell by 14% to RUB 1.89 million, the lowest level since February 2023.
At the same time, the turnover of the OTC yuan market increased sharply: in June, deals worth RUB 1.98 trillion were concluded there, up 27% from May. At the same time, intraday turnover broke records three times, exceeding the RUB 200 billion a day mark.
This means that the flows of yuan, which flow to Russia for oil sold to China, are moving from the exchange market to the over-the-counter market, following the dollar and euro, which were suspended on 13 June.
Market participants from China – the main suppliers of yuan liquidity – are at risk of being subject to secondary US sanctions, as MICEX is on the US Treasury’s SDN list, which prohibits any transactions.
At the end of June, the brokerage Sinara and Sberbank CIB, the investment subsidiary of Russia’s largest state-owned bank, reported problems with the withdrawal of yuan from the Moscow Exchange.
The Central Bank of Russia is already preparing for a scenario where exchange trading in the yuan will have to be stopped, just as it happened with the dollar and euro. Most likely, Chinese banks will gradually wind down operations with the Moscow Exchange and the National Clearing Centre, which has also been sanctioned.
At the same time, as 
wrote, the US is deliberately imposing lenient sanctions to keep petrol prices low. This leads to the following, among other things India is again accepting tankers with Russian oil.
