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Reports by Interfax, a Russian state-owned news outlet, on June 13 indicate that several Kyrgyz banks have initiated a partial halt in their transaction services with Russian counterparts. This move is a consequence of the latest sanctions enforced by the OFAC of the U.S. Treasury Department, unveiled on June 12, aimed at certain Russian financial channels utilized in dollar exchanges within the Russian FX market.
This suite of penalties lists the Moscow Exchange along with the National Clearing Center, and National Settlement Depository, which prompted the Moscow Exchange to declare the suspension of dollar and euro trades starting June 13.
Kyrgyzstan-based financial entities such as Mbank, Kompanion Bank, RKS Bank, Kyrgyz-Swiss Bank (KSB), Kyrgyzcommerzbank, and Keremet Bank have imposed varied limitations on transactions leveraging Russian payment systems, according to sources.
The affected banks reportedly reference the new stipulations as “temporary.” Conversely, Capital Bank, Khalyk Bank, and Bank of Asia have announced no such constraints on ruble transactions or monetary transfers involving Russia.
The extensive sanctions from Western nations against Moscow in response to its unrestrained aggression against Ukraine aim to restrict its financial inflows and cut off access to crucial wartime technology.
Russia has been striving to circumvent these sanctions, attempting to operate through intermediaries situated in regions such as Central Asia, China, Turkey, and the UAE.
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The departments of State and Treasury of the United States have issued what is termed as a “comprehensive” set of sanctions targeting Russia and those financially aiding it, as of June 12. These measures are part of ongoing efforts to undermine the economic capacities of Moscow during the conflict. The West has issued hefty e…
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FAQ
What caused the partial suspension of banking operations with Russia by Kyrgyz banks?
The suspension is largely attributed to the new round of U.S. Treasury Department sanctions targeting Russian financial institutions involved in dollar trading on the Russian foreign exchange market.
Which Kyrgyz banks have imposed restrictions?
Banks such as Mbank, Kompanion Bank, RKS Bank, Kyrgyz-Swiss Bank (KSB), Kyrgyzcommerzbank, and Keremet Bank have implemented restrictions on transactions using Russian payment systems.
Are these measures permanent?
Most of the affected banks describe the measures as “temporary.”
Have all Kyrgyz banks stopped operations with Russia?
No, some banks like Capital Bank, Khalyk Bank, and Bank of Asia report that they have no restrictions on ruble transactions or transfers with Russia.
What is the broader context of these sanctions?
They are part of wider international economic restrictions imposed by the West against Russia due to its invasion of Ukraine, designed to limit Russian state revenue and access to essential technologies for warfare.
