The «daughter» of Bank of China suspended operations with Russian banks

Today, the yuan on the Moscow Stock Exchange fell by 1.2% after the announcement of the Russian branch of Bank of China to suspend operations with sub-sanctioned companies. If other Chinese banks follow his example, it may lead to the cessation of exchange trading in the yuan.

Starting June 24, 2024, Bank of China stops processing payments in yuan from Russian banks located on the SDN List of the United States. However, the bank will continue to work with non-sanctioned credit institutions. The organization's website states that it specializes in money transfers to China using nostro accounts in the divisions of Bank of China in China.

The decision to suspend operations was caused by the bank's fears of falling under US sanctions. 

For the Russian market, this step will lead to additional costs both in terms of time and cost of payment processing. The business of the Bank of China subsidiary is largely focused on payments in yuan between Russia and China.