According to the Bank of Russia, by the beginning of September the volume of assets in foreign currency on the balance sheet of the country’s banking system amounted to $ 308.9 billion, and liabilities – $ 300.7 billion.
Thus, the protective spread between assets and liabilities dropped to 8.2 billion dollars, which is the minimum since February 2020. Everyone remembers the movement in the foreign exchange market in March this year. Then the ruble lost more than 25% against the dollar.
Difference Between Assets and Liabilities in Foreign Currency (USD Billion)
Source: Bank of Russia
Russian credit institutions do not have a kind of “safety cushion” in the form of a foreign currency reserve in case of a sharp demand for assets from bank creditors.
Credit institutions have ceased to hold a “cushion” since the fourth quarter of 2017. Recall that it was then that the ruble was close to its multi-year highs.
Banks stopped holding excess reserves in foreign currency and brought assets almost to a balance with liabilities after the volatility in the country’s foreign exchange market fell. However, this year it returned, but credit institutions have not yet reacted to it.
Based on their positions, where for several years, credit institutions have been betting on the weakening of the ruble, they simply do not believe in the long-term fall of the Russian currency.
Against the background of the active work of “printing presses” on the part of the world central banks, this strategy may be quite understandable, however, in times of uncertainty in the world financial markets, investors still prefer to withdraw their assets in dollars.
Thus, it can be stated that credit institutions are not ready for an abrupt exit from our country of non-residents. This is confirmed by the data of the Bank of Russia on the share of foreigners in OFZ – small sales by foreign investors have already led to a noticeable weakening of the ruble. What will happen if a global risk-off begins in the world ?!
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Similar statistics:
- Foreign exchange assets and liabilities of Russian banks
- The amount of foreign currency in accounts with Russian banks
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