Breaking News: Impending Expiry of U.S. Licence Could Impact Russian Businesses
As the deadline for the U.S. licence permitting transactions involving Russia's financial infrastructure approaches, concerns are rising among Russian businesses. The yuan has emerged as the most traded foreign currency in Moscow, leading to potential payment issues between Russia and China.
The U.S. Treasury's sanctions on Moscow Exchange and the National Clearing Centre have created a liquidity shortage in yuan. Chinese banks, wary of dealing with blacklisted Russian entities, may stop accepting payments from Russia after the licence expires on Oct. 12. This could lead to a further squeeze on yuan liquidity and disrupt payments between the two countries.
The central bank has urged commercial lenders to reduce their yuan loan portfolios to alleviate the liquidity shortage. However, the risk remains systemic for large Russian companies, with swap rates reaching up to 120%. The potential cancellation of yuan trading on Moscow Exchange could further destabilize the market.
In conclusion, the impending expiry of the U.S. licence could have significant implications for Russian businesses and the financial market. It is essential for companies to prepare for potential payment disruptions and volatility in the yuan market. Stay informed and stay ahead of the game in these uncertain times.