Russian Banks Eye CNY Solution as Central Bank Bars Forex Sales; New Sanctions Approved
The Russian ruble has been thrown into disarray as the nation attempts to battle economic sanctions by effectively suspending the sale of most foreign currencies – while exploring the notion of allowing citizens to purchase China’s fiat yuan.
In a press release from the Central Bank, the top regulatory body announced that it had created a “temporary procedure” that entailed a ban on withdrawals of more than USD 10,000 from foreign currency deposit accounts.
The bank added that it would allow citizens to withdraw more than this amount – but only if the holdings were converted to rubles “at the exchange rate on the day” of the withdrawals.
The measures have already come into force and “will be in effect until September 9, 2022.”
Commercial banks have also been ordered not to sell foreign currency to individuals in the aforementioned period.
The ruble plunged to unprecedented lows against the USD on the news, before bouncing back sharply. The size of the bounceback appears to be unclear, with TradingView data at the time of writing showing a 53% rise to the USD 0.12 mark and Investing.com data showing the ruble at a much lower USD 0.08 with a rise of 10%.
The Central Bank claimed that citizens would be allowed to keep funds in foreign currency deposit accounts, claiming that this money would be safe and “accounted for” in the currency in which the account or deposit was opened.
It added that the terms and conditions for accounts would not change and that interest on holdings would continue to be calculated.
Purging the dollar from the Russian economy is a stated long-term goal for Moscow, but the Kremlin now appears keen to turbo-charge the process – and could seek to do so via the Chinese yuan.
With large-scale desertion of the
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