China Holds Russia’s $100 Billion Reserve Hostage – The Moscow Times

Now the last unfrozen reserves of Russia are in the Chinese “trap”.

photo REUTERS
photo REUTERS

The Russian authorities have invested 17% of their own gold and foreign exchange reserves in the yuan, but now they are forced to admit that it is simply impossible to withdraw funds from Chinese assets.

This is reported by  The Moscow Times.

“The sale of yuan, in which more than $100 billion was invested from the gold and foreign exchange reserves as of January 1, requires a separate agreement with China. This is stated in the presentation of the Central Bank of the Russian Federation, prepared for a meeting with officials on the future fate of the reserves and plans fill them with “friendly” currencies,” the article notes.

According to the document cited by the publication, the Russian authorities are discussing the possibility of additional acquisition of yuan and other “soft” currencies for $70 billion. At the same time, the Central Bank of the Russian Federation admits that after the imposition of sanctions and a ban on transactions with dollars and euros, it is not easy to find assets for gold reserves.

The choice is limited to a few “friendly” countries.

“But the Turkish lira cannot get out of a “corkscrew” and has lost 90% of its value in 10 years. And the UAE dirham, according to the presentation, is prone to “political risks”: American officials have frequented the Emirates, who demand not to turn Dubai into a hub to circumvent sanctions “, – notes The Moscow Times.

Only the yuan remains, but there is a problem with it: “it is relatively easy to invest in Chinese assets, but not to withdraw money back.”

“This requires the permission of the Chinese authorities, and” it will be very difficult to obtain it in a crisis, “the Central Bank believes,” The Moscow Times emphasizes.

Thus, now the last unfrozen reserves of Russia are in the Chinese “trap”.

(c)UNIAN 2022

2 comments

  1. The Chinese are in a crisis with their economy sliding rapidly down the sewer because of corruption in the real estate sector. Putin’s “assets” are unlikely to ever go home.

    Liked by 1 person

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