A man adjusts foreign exchange rates at the board of forex office in Moscow.
Photo: Maxim Polyakov
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Russians Fill Bi-Currency Baskets
The Central Bank of Russia registered the unprecedented demand of individuals for foreign currency. The amount soared to $16.9 billion in October, setting the record of foreign exchange monitoring that the CBR carries out from 1996. Having taken away the money from ruble deposits, the individuals were buying both dollars and euros in October, placing a portion of their withdrawal at foreign exchange deposits. The analysts apprehend that some $100 billion will be converted from rubles to dollars in the near term.
Under the CBR’s outlook of the local market of cash foreign exchange, the amount of currency acquired in foreign exchange offices or withdrawn from forex accounts stepped up by 89 percent on month to $16.9 billion in October. It is the absolute record of all monitoring history, which beginning dates back to 1996. The amount was 2.5 fold above the indicators of 2006 and 2007. Overall, the individuals withdrew from forex accounts $5.7 billion in cash in October, 94 percent more than in September.
The aggregate supply of foreign currency to individuals (the sales via foreign exchange offices, conversion operations and crediting on forex accounts) grew 12 percent to $6.5 billion in October. So, the net demand for cash foreign exchange exceeded $10.3 billion, 3.4 fold up vs September.
In the foreign exchange offices and cashier’s offices, the sales of cash foreign exchange grew 87 percent on month in October. The euro demand of the population stepped up 2.2 fold on month to $8.28 billion, while the dollar demand soared 68 percent to $8.47 billion.
“Once the CBR set to ruble’s moderate depreciation, it was clear that the nation would convert their savings from rubles into the foreign exchange,” said Yulia Tseplyaeva, who is the chief economist of Merrill Lynch Russia and CIS.
In an effort to halt the record outflow, the banks are hiking rates of ruble deposits. At the same time, the yield of forex deposits is lowering. The banks tend to level the currency risks on higher demand for forex deposits.
www.kommersant.com
All the Article in Russian as of Dec. 05, 2008
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