Russia adjusts financial sector and looks to renminbi

Significance

Russia's banking sector suffered a USD26bn loss in January-June. Russia is shut out of international capital markets and is almost exclusively reliant on domestic investors to raise funds. As an alternative, it is engaging more with China and buying its currency.

Impacts

• The CBR will test its 'digital ruble' within Russia next year before introducing it for cross-border transactions.
• Russia could also start using cryptocurrencies for international payments as early as 2023.
• Personal investors will be offered tax incentives on new investment products with a long maturity.