Major Russian banks have called on the central bank to take action to counter a yuan liquidity deficit, which has led to the rouble tumbling to its lowest level since April against the Chinese currency and driven yuan swap rates into triple digits.

The rouble fell by almost 5% against the yuan on Sept. 4 on the Moscow Stock Exchange (MOEX) after the finance ministry's plans for forex interventions implied that the central bank's daily yuan sales would plunge in the coming month to the equivalent of $200 million.

The central bank had been selling $7.3 billion worth of yuan per day during the past month. The plunge coincided with oil giant Rosneft's 15 billion yuan bond placement, which also sapped liquidity from the market.

"We cannot lend in yuan because we have nothing to cover our foreign currency positions with," said Sberbank CEO German Gref, stressing that the central bank needed to participate more actively in the market. The yuan has become the most traded foreign currency on MOEX after Western sanctions halted exchange trade in dollars and euros, with many banks developing yuan-denominated products for their clients. Yuan liquidity is mainly provided by the central bank through daily sales and one-day yuan swaps, as well as through currency sales by exporting companies.

Chinese banks in Russia, meanwhile, are avoiding currency trading for fear of secondary Western sanctions.

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[–] MrMakabar 30 points 2 months ago (1 children)

Russia only has $31billion worth of Yuan left in the national wealth fund, which also acts as the reserve of the Central Bank. So needing to sell $7.3billion worth of Yuan to stabalize the Rubel is quite a large burden and with it seeming to be too little, this is a giant nightmare for Russia.

[–] TransplantedSconie@lemm.ee 21 points 2 months ago

[–] eran_morad@lemmy.world 14 points 2 months ago

Fuck russia.

[–] Tar_alcaran@sh.itjust.works 10 points 2 months ago

Well, if Russia wasn't a criminal kleptocratic war criminal state, they could just swap their excess rupee for yuan.

Alas

[–] Buffalox@lemmy.world 9 points 2 months ago

"We cannot lend in yuan because we have nothing to cover our foreign currency positions with," said Sberbank CEO German Gref,

Sberbank is a Russian state owned bank, so I'm surprised he's allowed to say that? Especially since the Russians are jumping through hoops to make it look like their economy is fine.

But most people here are probably already aware that the Russian economy has been stressed to the limit for a while now, and the cracks are beginning to show.

[–] partial_accumen@lemmy.world 8 points 2 months ago (1 children)

They hopefully understand the need to increase the liquidity offer through swaps," said Andrei Kostin, CEO of second-largest lender VTB, stressing that exporters should sell more yuan as well.

If I'm reading this right, this is a call on companies that have yuan on their books from export sales to China are being asked to sell their yuan into domestic (russian) currency markets and presumably buy ruble. As in, are they asking private businesses to help out because the Central Bank has exhausted its resources?!

[–] Milk_Sheikh@lemm.ee 3 points 2 months ago

Exhausted their forex reserves of yuan, yup.

I can’t imagine why China would be demanding yuan instead of rubles lately…

[–] AllNewTypeFace@leminal.space 4 points 2 months ago

Oh dear, how sad