Russian banks import 5 billion USD in foreign currency

 Russian banks import 5 billion USD in foreign currency

Observers say that Russian banks are preparing for the case that Western sanctions increase the demand for foreign currency.

Russian credit rating agency ACRA estimates that the country's banks imported 5 billion USD in cash in December 2021, up from 2.65 billion USD in the same period a year earlier. The dollar is the most imported.

Observers say the move is to prepare for the case that Western sanctions increase the demand for foreign currency. Many Russians want to hold foreign currency to prevent the ruble from depreciating or inflation accelerating. Sanctions can all cause these things.

Valery Piven, senior director at ACRA, told Reuters that calculations based on documents that banks submit to the Central Bank of Russia each month show that they also imported $2.1 billion in foreign currency in November. 2021.

Reuters quoted sources close to the US as saying that the US is considering imposing new sanctions on Russia. The proposed measures are to ban some of Russia's top banks from trading in dollars and reduce their ability to meet dollar-denominated debt obligations.

"The ratio between foreign currency and banks' debt is regulated by the central bank and does not present a problem. The increase in foreign currency imports is more related to the likely demand for cash to skyrocket." Piven said.

Russian banks regularly import foreign currency in the form of cash to meet the needs of customers for dollars or euros for moving abroad, or in contingencies.

Despite high tensions in Ukraine, Russia's foreign currency imports in December were still much lower than the 18 billion USD at the end of 2014 - when the ruble was in free fall following Russia's annexation of Crimea. Russia has so far denied it plans to attack Ukraine.

Data from the Central Bank of Russia shows that about half of the foreign exchange reserves and debts of the country's banks are in US dollars. These rates are down from 80% in 2002 and 70% in 2014.

Leading Russian banks including Sberbank, VTB, VEB and Gazprombank are among the target group of US sanctions, according to a Reuters source on February 21.

CNN quoted sources close to the news as saying that in preparation for the possibility of sanctions when US officials first suggested this a few years ago, leading Russian banks have opened accounts in each other's systems. allowing them to transfer local dollars, as long as there is at least one large bank that is not sanctioned.

Kremlin spokesman Dmitry Peskov said yesterday only: "We are aware that Washington is constantly drafting new sanctions proposals." Russian Finance Minister Anton Siluanov last week vowed to ensure all debts of banks, including in foreign currencies, are paid on time if sanctions affect the financial system.