Russia Says Almost Half Of Its Reserves Are Frozen, And Counts On Ties With China

A child holds the national flags of Russia and China before a welcome ceremony for Russian President Vladimir Putin outside the Great Hall of the People in Beijing, China, June 25, 2016. REUTERS/Kim Kyung-Hoon

LONDON, March 13 – Russia said on Sunday it was counting on Chinese help to help it weather the blow to its economy from Western sanctions that it said had frozen almost half of its gold reserves.

“We have part of our gold and foreign exchange reserves in Chinese currency, in yuan. And we see the pressure Western countries put on China to limit mutual trade with China. Of course, there is pressure to limit access to these reserves,” Finance Minister Anton Siluanov said.

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

Western countries have imposed unprecedented sanctions on Russia’s corporate and financial system after it invaded Ukraine on February 24 in a so-called special military operation.

Siluanov’s comments in the TV interview were Moscow’s clearest statement that it will seek Chinese help to soften the blow.

The two countries have stepped up cooperation recently as both have come under heavy pressure from the West on human rights and a host of other issues.

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

Sanctions on Russian reserves have become one of the most painful measures for the Russian economy.

A month ago, Siluanov said that Russia would be able to withstand sanctions thanks to abundant reserves, and even considered issuing Eurobonds to foreign investors after market volatility subsided. More

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

Siluanov also said that Russia would fulfill its obligations under the state debt and would pay rubles to the holders of the debt until the state reserves were unfrozen.

Editing by Susan Fenton

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