Russian companies are scrambling to open accounts with a Chinese state bank in Moscow as a way to escape international sanctions imposed following Russia’s invasion of Ukraine.
As Reuters reported Thursday (March 3), a source at the bank said 200 to 300 companies had approached the bank to open new accounts.
The report notes that it’s unclear how wide ranging the demand was among Russian businesses for new accounts at Chinese banks, although the source said many of the companies in question already do business in China and he expected yuan transactions to increase among these firms.
The sanctions — imposed by the U.S. and a number of its allies — caused Russia’s currency to plummet to the point where on Russian ruble was worth less than a penny. Interest rates climbed, and several different companies vowed to stop doing business in Russia. In addition, seven of the country’s largest banks were blocked from accessing the crucial SWIFT international messaging system.
Amid all this international pressure, China has opposed sanctions against Russia.
Read more: China Will Sit Out Russia Sanctions, Regulator Says
On Wednesday, Cuo Shuqing, the head of the China’s banking and insurance regulator, said the country “will not participate in such sanctions, and we will continue to maintain normal economic, trade and financial exchanges with relevant parties.”
Reuters says a few Chinese state banks have operations in Moscow, among them Industrial & Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank. The latter of these declined to comment, while the other three did not respond to requests for comment, Reuters said.
See also: Russian Consumers Not Panicked by Sanctions, Report Says
The news report also quoted a Chinese businessman with long-standing ties to Russia who says a number of Russian firms he works with plan to open yuan accounts.
“It’s pretty simple logic,” said the businessman, who also asked not to be named. “If you cannot use U.S. dollars, or euros, and U.S. and Europe stop selling you many products, you have no other options but to turn to China. The trend is inevitable.”
