Expert: “Chinese currency is very convenient to buy and pay with it”
There is less and less foreign currency in the country, but the ruble stock is rapidly growing in volume, which undermines the exchange rate position of the ruble. Realizing the urgency of the problem, the state decided to use one more tool from its arsenal. We are talking about currency swap operations (in this case with the yuan), which may be allowed to be carried out by the federal treasury. According to experts, this measure is useful, but frankly secondary.
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Currency swap – This is an agreement to exchange a specified amount of one currency for another on a certain date. The Ministry of Finance has a large amount of yuan in reserves, and banks from time to time have a shortage of yuan liquidity. According to the government decree, the treasury will have the right to provide commercial players with yuan secured by rubles through a swap. That is, banks will actually receive one-day loans in Chinese currency from a government agency, and that – earn on the exchange rate. Until February 2022, the Treasury carried out such operations with dollars and euros, but the sanctions put an end to them, transferring these currencies to the Russian financial authorities into the category of toxic.
From January 2023, swap transactions for the sale of yuan for rubles (with their subsequent purchase for a period of one day) began to be carried out by the Central Bank. These transactions are concluded on the Moscow Exchange. For example, on May 5, 2023, credit institutions attracted a record amount of yuan from the Bank of Russia – by 51.6 billion rubles. The Chinese currency is in demand by businesses, but the problem is that market players keep some part of it in Chinese bank accounts. From here – permanent shortage of «long» domestic yuan liquidity.
“We are talking about a standard mechanism that the financial authorities use when banks and enterprises face a serious shortage of foreign exchange liquidity,” says financial analyst Sergei Drozdov. – And the fact that these swap operations involve the yuan – absolutely logical: the vast majority of imports come to Russia from China; Yuan is very convenient to buy and pay with them. In addition, the turnover of yuan trading is constantly growing, already exceeding 40% of the total volume of foreign exchange transactions on the Moscow Exchange (the dollar has about 42%)».
It is unlikely that in the coming days the government will take any more similar measures to stabilize the financial situation and the ruble exchange rate. He managed to informally agree with exporters to increase the sale of foreign exchange earnings, so it was decided to limit themselves to monitoring their actions for the time being (refraining from introducing strict standards of 80% or 90%). Companies evading the return of proceeds were warned that they could be deprived of subsidies and other state support measures. So, Drozdov argues, exporters are well aware of the full extent of their responsibility and «voluntariness»; actions. As they say, the party said: it is necessary! Komsomol answered: yes! But the question arises: why was it necessary to raise the key rate to a prohibitively high 12% per annum, if it was possible to limit oneself to this instrument?
“Currency swap operations have always been in the arsenal of the Central Bank, so the practice is absolutely normal,” says Nikita Maslennikov, a leading expert at the Center for Political Technologies. – The obvious goal – expand the range of sources of foreign exchange. The measure is not useful, but can only be considered as an auxiliary tool, as an addition to the tools already involved. Today, the situation with foreign exchange liquidity depends, first of all, on the extent to which exporters will be able to increase sales of their foreign exchange earnings on a voluntary basis. Such a scenario is extremely unlikely, as sales are currently above 80% on average.
The fundamental reasons for the imbalance between exports and imports remain. In order to eliminate this disproportion, it is necessary to speed up export supplies by entering new markets, offer foreign partners new competitive products, and achieve real progress in import substitution. And for starters – improve business conditions in Russia: when there is no investment, where does the supply of foreign currency come from? Maslennikov does not expect a significant impact on the ruble exchange rate from the Treasury's admission to currency swap operations.