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Dollars Piling Up in Russian Banks
Foreign currency deposits in the Russian banking system were up for the second month in a row, according to Central Bank statistics released Friday. Currency deposits increased by 122 million rubles in February of this year as compared to December of last year. Over the same time, the money mass, calculated by monetary survey, grew only insignificantly, from 10.1 billion rubles to 10.2 billion rubles, in that time. There is now 1.3 billion rubles' worth of foreign currency in Russian banks. This may be the beginning of the slowdown of dedollarization analysts have been expecting.
In the course of last year, the ratio of foreign currency deposits to the money mass calculated by monetary survey decreased from 17 percent to 11 percent. In February of this year, that indicator had risen again to 13 percent. Last December, the Russian public converted a record amount of foreign currency – $7.7 billion – into rubles. In 2005 and 2006, deposits grew (by 42.3 and 48 percent, respectively, to reach 1 trillion rubes), even as interest rates fell. Thus the volume of foreign currency in those deposits was reduced by 10 percent in 2006.
Although the rubles has been strengthening, reaching its highest mark against the dollar since 1999 earlier this year, Russian government economic bodies predict that the rate will turn around in the middle perspective and the dollar will rise again, possibly reaching 32.7 rubles to the dollar by 2010. At the same time, due to raw materials prices, the surplus in current account position, which was $97 billion last year and $94 billion in the Central Bank's publication yesterday, will turn into a $41-billion deficit, according to the Ministry of Economic Development and Trade's updated “Scenarios of Conditions for the Socio-Economic Development of the Russian Federation for 2008 and through 2010.”
Authorities are beginning discussions of allowing the ruble to exchange freely. First deputy chairman of the Central Bank Alexey Ulyukaev said that unmanaged ruble exchange could start no sooner than 2010.
www.kommersant.com
All the Article in Russian as of Apr. 03, 2007
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