Share of yuan deposits in Russian banks grows

The share of Russians’ deposits in the Chinese currency continues to grow, due to relatively high interest rates offered for yuan deposits, as well as diversification opportunities. It is expected that the yuan will continue to push the euro and the dollar out of the foreign currency deposit structure. Even now, yuan deposits account for more than 25% in some banks and experts estimate that this share may reach 50% by the end of the year.

Alexander Demyanchuk / RIA Novosti

According to Nikita Kazantsev, Product and Service Director at DOM.RF, the share of foreign-currency deposits in the bank’s overall structure of deposits has not changed and remains at around 1%. However, there have been changes in currency distribution.

“We have noted a trend for increasing the share of the the yuans in attracted foreign-currency funds, from 11% to 26%,” the expert notes.

It is true that the share of the yuans in Russians’ foreign-currency deposits has grown as of late, according to AMarkets Analytics Director Artem Deev. This share has doubled since the beginning of the year, reaching 26%. In banks like VTB, the Chinese currency amounts to over one-third of the total volume of foreign-currency deposits by retail clients. Some experts are inclined to suggest that by the end of the year, the share of the yuan may grow further and reach 50%, the analyst stresses. Among other things, the yuan’s popularity is driven by relatively high interest rates on yuan deposits, as well as diversification opportunities.

“However, my assessment of the prospects of the Chinese currency is more restrained. The fact is, the Chinese government is responsible for setting the yuan’s exchange rate. So, any minute, Beijing may draw any exchange rate that suits its interests, which is not very reliable. Also, some major Chinese banks refuse to cooperate with Russian banks and even process transactions with a ‘Russian trace.’ So, although the yuan is not a toxic currency like the dollar or the euro, we can’t call it exactly friendly either,” Artem Deev concludes.

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