Russian Banks Urge Central Bank Action Amid Yuan Liquidity Deficit - Rouble Tumbles
Major Russian banks are calling on the central bank to address a yuan liquidity deficit, resulting in the rouble plummeting to its lowest level against the Chinese currency since April. The rouble fell by nearly 5% on Sept. 4, following the finance ministry's plans for reduced forex interventions and the issuance of a 15 billion yuan bond by Rosneft.
Sberbank CEO German Gref emphasized the need for the central bank to intervene more actively in the market, as the rouble's depreciation against the yuan has disrupted trade. The yuan has become the most traded foreign currency on the Moscow Stock Exchange, with banks offering yuan-denominated products due to Western sanctions.
The central bank provides yuan liquidity through daily sales and one-day swaps, but Chinese banks in Russia are refraining from currency trading due to fears of secondary Western sanctions. Banks recently secured a record 35 billion yuan from the central bank through swaps, highlighting the severity of the liquidity shortage.
The delays in payments for Russian trade by Chinese banks, coupled with the absence of a joint payment system, have exacerbated the yuan shortage. VTB CEO Andrei Kostin believes that increasing liquidity through swaps and encouraging exporters to sell more yuan could alleviate the crisis.
In conclusion, the yuan liquidity deficit in Russia has significant implications for trade and currency markets. Investors and individuals should monitor developments closely, as the central bank's actions and trade dynamics could impact the rouble's exchange rates and overall financial stability.
