12.08.2024, 14:58
Banks have reduced the issuance of foreign currency loans due to a shortage of yuan
Source: OREANDA-NEWS
OREANDA-NEWS In June 2024, Russian banks sharply reduced the issuance of foreign currency loans to businesses amid a shortage of yuan. RBC writes about this with reference to the statistics of the Central Bank of the Russian Federation.
The total volume of such foreign currency loans fell by 27.6 percent compared to May, to 420.9 billion rubles (34.99 billion yuan). This figure was the lowest since November 2023 (with the exception of the seasonal decline in lending in January).
At the same time, the share of foreign currency loans in the total volume of loans to companies decreased from more than 8 percent in April-May to 6 percent. According to experts, the decrease in the issuance of such loans is due to the problem with yuan liquidity in the Russian market. A number of Chinese banks are cautiously working with Russia due to sanctions risks, and payments have to be made through third countries. As a result, not only the costs of such operations are increasing, but also the volume of incoming yuan in the Russian Federation is decreasing, explains Anatoly Perfiliev, Junior Director for Bank Ratings at Expert RA agency.
The increase in the key rate of the Central Bank of the Russian Federation also exacerbates the yuan deficit in a number of banks. Against this background, it becomes less profitable for companies and individuals to place funds on deposits in Chinese currency than in rubles. In addition, the shortage of yuan is affected by a decrease in the inflow of exporters' revenue, added Valery Piven, head of the ACRA financial Institutions ratings group. In his opinion, there are risks of a further decline in lending in yuan.
According to Alexander Isakov, chief economist for Russia at Bloomberg Economics, the yuan in Russia has not ended, rather, the liquidity shortage is due to the unequal distribution of Chinese currency between organizations under sanctions. The current restrictions even affect organizations in the domestic market, including the Russian "daughters" of banks from China.
The total volume of such foreign currency loans fell by 27.6 percent compared to May, to 420.9 billion rubles (34.99 billion yuan). This figure was the lowest since November 2023 (with the exception of the seasonal decline in lending in January).
At the same time, the share of foreign currency loans in the total volume of loans to companies decreased from more than 8 percent in April-May to 6 percent. According to experts, the decrease in the issuance of such loans is due to the problem with yuan liquidity in the Russian market. A number of Chinese banks are cautiously working with Russia due to sanctions risks, and payments have to be made through third countries. As a result, not only the costs of such operations are increasing, but also the volume of incoming yuan in the Russian Federation is decreasing, explains Anatoly Perfiliev, Junior Director for Bank Ratings at Expert RA agency.
The increase in the key rate of the Central Bank of the Russian Federation also exacerbates the yuan deficit in a number of banks. Against this background, it becomes less profitable for companies and individuals to place funds on deposits in Chinese currency than in rubles. In addition, the shortage of yuan is affected by a decrease in the inflow of exporters' revenue, added Valery Piven, head of the ACRA financial Institutions ratings group. In his opinion, there are risks of a further decline in lending in yuan.
According to Alexander Isakov, chief economist for Russia at Bloomberg Economics, the yuan in Russia has not ended, rather, the liquidity shortage is due to the unequal distribution of Chinese currency between organizations under sanctions. The current restrictions even affect organizations in the domestic market, including the Russian "daughters" of banks from China.
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