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Russia and China are working together to create an interbank messaging system that would link their own separate financial messaging systems, a Russian MP said today, as Moscow responds to Western sanctions on its own financial system.
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Several Russian banks have been blocked from the international interbank payment system SWIFT, in connection with the events in Ukraine, which prevents them from transferring money outside Russia.
The interbank messaging system developed by the Central Bank of Russia's System for Transfer of Financial Messages (SPFS); can ensure the flow of domestic interbank transactions, but is limited in the timing, size and complexity of the transactions it can carry out.
Linking them to the Chinese payment platform CIPS is another possible option. However, the Chinese platform can only be used to send payments in yuan.
"To avoid the risks associated with trade transactions, we need to establish cooperation between the financial messaging systems of Russia and China," said Anatoly Aksakov, head of the State Duma (lower house of parliament) Committee on Economic Affairs.
"I know that such cooperation is underway," he said. "Our Central Bank is cooperating with the People's Bank of China and I believe that the current situation will give impetus to the relevant processes."
The Russian Finance Ministry announced that Moscow will make use of its foreign exchange reserves in yuan, as its foreign exchange reserves in dollars and euros have been frozen.
Meanwhile, some Russian banks are using cards from China's UnionPay payment system, as Visa and Mastercard cards cannot be used abroad after sanctions were imposed.
Source: APE-MPA
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