Russian banks face US dollar shortage

Baku. 28 September. REPORT.AZ/ Russian banks have attracted a record-breaking currency through swap transactions from the Central Bank (Russian Bank). Report informs citing the RBC, the emergence of such a situation indicates the shortage of currency in banks.

Experts predict that currency demand will continue and that U.S. dollar will rise.

Notably, according to the information from Central Bank of Russia on September 26, banks have attracted 1.5 bln US dollars through the currency swap.

Denis Poryvay, an analyst at the Moscow office of the Raiffeisen Bank in Austria, believes that currently the foreign currency reserves at banks are equal to zero.

Head of Operations, Foreign Exchange and Money Markets "Metallinvestbank" Sergey Romanchuk believes, the growth in demand for this instrument indicates that there is a currency outflow from Russia and that free balances held on correspondent accounts of banks are decreasing or becoming insufficient to meet the demands of customers for payments.

Notably, A currency swap, sometimes referred to as a cross-currency swap, involves the exchange of interest and sometimes of principal in one currency for the same in another currency. Interest payments are exchanged at fixed dates through the life of the contract. It is considered to be a foreign exchange transaction and is not required by law to be shown on a company's balance sheet. This instrument was introduced by the Russian Central Bank in September 2014 as part of the transition to a floating ruble exchange rate.
Poryvay also noted that the reduction in currency reserves started in the spring. In March, foreign currency liquidity of banks amounted to 1.6 bln, 3.7 bln in April, 4.3 bln in May, 0.7 bln in June, and 3.2 bln in July. The analyst said that by the end of the year the demand for the currency will not decrease. Thus, in the last quarter, the volume of foreign debt of companies amounted to $ 28 bln and most of them is expected in December.

According to Rosbank, the U.S. dollar rate will be 60.3 rubles at the end of the year. At present, it is sold at 58.2 rubles on Russian currency market.