Russian companies switch to yuan

Corporate clients of Russian banks are actively replacing on their accounts dollar and euro with yuan. According to the Bank of Russia, share of alternative currencies on corporate accounts reached 42%. Mainly corporate clients use them for settlements.

Foreign exchange balances on accounts of companies in Russian banks in “unfriendly” currencies are rapidly declining. By the beginning of June, their share decreased to 58% of the total volume of foreign currency deposits, while at the beginning of the year it exceeded 76%. This is confirmed by data on deposit and current accounts of legal entities from the recently published review of the Central Bank on the risks of financial markets. If current trends remain, the share of funds in “friendly” currencies by the fall may exceed half of total currency accounts.

“Decrease in dollar and euro revenues and increase in yuan revenues create imbalances in the foreign exchange market, – notes the economist, associate professor of RANEPA Sergey Khestanov. – How far the process will go and will it give rise to big problems – it is yet unclear. But the rise of spreads (the difference between currency purchase and sale rates. – Ed.) and a decrease in the liquidity of the dollar and euro in Russia are quite likely.”

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