With half of its reserves frozen, Russia is counting on ties with China

Russia said Sunday it was counting on China to help it withstand the blow to its economy from Western sanctions, which it said had frozen nearly half of its gold and foreign exchange reserves.

“We have some of our gold and foreign exchange reserves in the Chinese currency, in yuan. And we see the pressure Western countries are putting on China to limit trade with China between them. Of course there is pressure to limit access to those reserves. said Finance Minister Anton Siluanov.

“But I think that our partnership with China will still allow us to maintain the cooperation we’ve achieved, and not only maintain it, but also increase it in an environment where Western markets are closing.”

Western countries have imposed unprecedented sanctions on Russia’s business and financial system since it invaded Ukraine on February 24 in what it calls a special military operation.

Siluanov’s comments in a TV interview were Moscow’s clearest statement yet that it will seek help from China to cushion the impact.

The two countries have intensified cooperation in recent times as both countries have come under strong Western pressure over human rights and a host of other issues.

Also read: 35 killed in Russian attack on military base near border with Poland: Ukraine

Russian President Vladimir Putin and Chinese President Xi Jinping met in Beijing on February 4 and announced a strategic partnership they said was aimed at countering the influence of the United States, describing it as a friendship without borders.

The sanctions against Russian reserves have become one of the most painful measures for the Russian economy.

A month ago, Siluanov said Russia could resist sanctions thanks to abundant reserves and even consider offering Eurobonds to foreign investors once market volatility subsides.

On Sunday, he said the sanctions had frozen about $300 billion of the $640 billion Russia had in its gold and forex reserves.

Siluanov also said that Russia will honor its sovereign debt obligations and pay rubles to its debt holders until the state reserves are thawed.

Also read: Ukraine crisis: India temporarily moves its embassy to Poland

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