Russian Banks Begin Offering Accounts in Chinese Yuan, Says It Can be Used in Trade with China

It has begun.

RT:

With Russia now officially cut off from both the US dollar and the euro, the state-owned VTB Bank has offered its clientele the opportunity to open Chinese yuan savings accounts that yield a maximum interest rate of 8%. The country’s second-biggest bank has been hit by the Western sanctions aimed at the total financial isolation of Russia over its war in Ukraine.

“In light of the rising dollar and euro exchange rates, many clients are showing interest in investing in other currencies, and the yuan is one of the most affordable and promising options for investing funds,” the bank said in a statement.

Existing customers are reportedly able to open deposits remotely on VTB Online with a minimum amount of 100 yuan ($16). At VTB branches, they can deposit a minimum of 500 yuan.

According to the bank, the latest offer will be the most profitable alternative to deposits in other foreign currencies. The annual yield on a three-month deposit is 8% in dollars and 7% in euros.

…

“Some Russian banks can’t get access to other currencies, so yuan is probably the best other alternative,” Khoon Goh, head of Asia research at the Australia & New Zealand Banking Group, told Bloomberg.

“Still, the easiest way for Russia to raise yuan would be to receive yuan via trades. Russian banks’ clients who are exporters could sell to China and receive renminbi as payment.”

Yes.

That is something they could do.

Oil exporters could do that, in fact.

The US would obviously throw a fit if China began buying Russian oil in yuan, but what are they going to do?

Put the same sanctions on China that they’ve put on Russia?

Go around your house and look at which products are made in China, and then tell me how it would be possible for the US to sanction China the same way they’ve sanctioned Russia.

It simply would not be possible.

In fact, the reverse would be more likely – if threatened with sanctions, China could cut off trade with the US. Yes, that would cost them in the short run, but it would also collapse the United States, which would presumably be worth a bit of austerity.

Things are moving very quickly here, folks.