De-Dollarization Continues: Russian Oligarchs Shift Cash To Hong Kong Dollars On Sanctions Concerns

Tyler Durden's picture

Last week we noted the very significant activity by the Hong Kong Monetary Authority as it bought USDollars in size to support its peg. It appears we have found at least one smoking gun for why they were forced to do this. In what appears to be another sanctions-blowback, Russian oligarchs are de-dollarizing their cash holdings and shifting to Hong Kong Dollars. As Bloomberg reports, various Russian entities are shifting up to 40% of their cash to HKD. “Keeping money in Hong Kong dollars is essentially equivalent to keeping it in U.S. dollars because of the currency peg," notes BofA's Vladimir Osakovskiy, adding "for Russian companies it’s still much safer from the standpoint of sanctions."

 

As Bloomberg reports,

OAO MegaFon (MFON), billionaire Alisher Usmanov’s wireless operator, said it has been shifting cash holdings into Hong Kong dollars, a move people say metals producer OAO GMK Norilsk Nickel (GMKN) is also undertaking, as the U.S. and Europe ratchet up sanctions against Russia.

 

MegaFon decided to keep about 40 percent of its cash in Hong Kong dollars given the global markets disturbances, Chief Financial Officer Gevork Vermishyan said in a phone interview. The Moscow-based carrier has traditionally kept its foreign cash in U.S. dollars and euros, according to the company.

 

Norilsk Nickel, the world’s largest producer of nickel and palladium, is also keeping some of its cash in Hong Kong dollars now, two people with knowledge of situation said, asking not to be identified as information isn’t public.

 

The Hong Kong dollar has been linked to the U.S. dollar since 1983, and its fluctuation from the American currency hasn’t exceeded 1 percentage points since then...

Keeping money in Hong Kong dollars is essentially equivalent to keeping it in U.S. dollars because of the currency peg,” said Vladimir Osakovskiy, chief economist of Bank of America Corp.’s Russian unit. “Still, for Russian companies it’s much safer from the standpoint of sanctions.”

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One more chip in the US Dollar's global hegemony armor...

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kchrisc's picture

Sounds prudent to me, as if the Rothschild Fed doesn't steal it via inflation, then the DC US will via violence.

realWhiteNight123129's picture

This is absolutely a BRILLIANT move. Why? Because techically the Hong-Kong balance is the same as the USD (pegged), however Hong-kong does not ahve the banking problems of the US or consumer debt problems or Gov debt problems of the US. So, if the USD goes awful, the billionaires have a call option.

 

Now can the US prevent Hong-Kong to hold USD after and impose sanctions of hte whole of Hong-Kong. Technically yes, but that would force Hong-Kong to depeg the HKD from USD. And also it would send a signal that no dollar holdings are safe and so massive dumping ensues.

Check mate !!! Those guys advised by Jack  Lew are fucking monetary retards.....

 

bid the soldiers shoot's picture

 

 

Now can the US prevent Hong-Kong to hold USD after and impose sanctions of hte whole of Hong-Kong. 

Just of of curiosity, what is your mother tongue? 

 



realWhiteNight123129's picture

Not English as you can tell obviously! Mother tongue is French.

Kirk2NCC1701's picture

Late post... Only last week Simon Black had a post and a podcast that advised people to move some of their USDs into HKDs.

Looks like Simon has the ears of Russian Oli's also.

bid the soldiers shoot's picture

 

 

"THE DUMMIES' GUIDE TO CHINA'S RELATIONSHIP WITH THE US DOLLAR."

China possesses TWO THOUSAND BILLION USD.  While it holds those USDs, it wants the value of the USD to higher than 'Tiangong."

On the other hand, it is the considered opinion of the Bank of China that China does not need any more USD.

Confucius Say  whenever necessary to keep USD out of shitter, buy it with Hong Kong dollars and not yuan.