Billions of dollars loan from Chinese banks to Russia

After Western banks ceased their activities in Russia due to the Russia-Ukraine war, Chinese banks stepped in to fill the void.

China’s influence in the Russian banking sector quadrupled in the 14 months to the end of March this year, according to data from the Kiev School of Economics.

The risk assets of China’s four largest banks rose from $2.2 billion in early 2022 to nearly $10 billion in 14 months.

Overall, the share of foreign banks in Russian banking assets fell from 6.2 percent to 4.9 percent in the 14 months from the start of the war to March.

CHINA’S GOAL TO MAKE THE YUAN A GLOBAL CURRENCY

The moves by Chinese banks are seen as part of Beijing’s efforts to promote the Chinese yuan as an alternative global currency to the dollar.

Andrii Onopriienko, Deputy Director of Development at the Kiev School of Economics, said in a statement on the matter that the loans granted by Chinese banks to Russian banks and credit institutions achieved their goal.

Whereas the Chinese yuan’s share of Russia’s export payments before the war was less than 1 percent, it now stands at 16 percent. The ratio of the dollar and the euro, which was above 60 percent, fell below 30 percent.