Due to the cut-off of some Russian banks from the international payment system SWIFT, the export of Russian energy commodities is beginning to be affected. Customers are figuring out how to pay Russia for coal.
One of them is China, which is limiting its imports of Russian coal due to problems with financing. Because of the impact of anti-Russian sanctions, in particular the disconnection of some Russian banks from the SWIFT payment system, they have no way to pay for coal. Trade between the two countries is mostly in dollars.
Moreover, China is the largest buyer of Russian coal, purchasing over 50 million tonnes of it in Russia last year for just under $7.5 billion. Russia has long provided about 15 percent of China’s coal imports, and Indonesia is the most important supplier of coal to the world’s most populous country.
“Most banks have stopped issuing letters of credit after the disconnection from SWIFT, and since almost all contracts are dollar-denominated, we have no other way to make payments,” a Chinese trader in Russian coal told Reuters.
Other traders have offered to pay Russian suppliers in Chinese yuan. But according to Reuters, they are still waiting for a response from their Russian counterparts.