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Third of Banks' Foreign Loans in Rubles
According to Central bank data published yesterday, foreign assets in the Russian banking system as of January 1, 2008, had reached $95.3 billion, of which 88 percent were in foreign currency ($63.4 billion in U.S. dollars and $16.4 billion in euros). The remaining 12 percent were in rubles. Russian banks' foreign obligations were significantly higher at $163 billion. The share of ruble-denominated instruments was also higher, at 21 percent.
Net foreign assets (the difference between assets and obligations) are negative, as they have been for the last three and a half years. Russian banks are attracting credits from nonresidents (mainly from the EU) faster than the growth of credits abroad. As a result, the influx of net foreign asset capital on January 1 was -$67.7 billion. There were almost no euros in that volume. The assets and obligations in euros are balanced, dollars make up about two-thirds of it and rubles the remainder. In other words, a third of the net debt of Russian banks to nonresidents is calculable in rubles. Russian banks, rationally, have been trying to borrow cheap dollars lately, and foreigners have been trying to credit them in expensive rubles.
A volume of $22.5 billion, or 550 billion rubles, is sufficient to say that operations such as the issue of Eurobonds in rubles the purchase of Russian securities by foreigners or the attraction of rubles deposits by nonresidents, are no longer exotic and have become macroeconomically significant. Judging from the Central Bank data, that has happened after the decision was made to cancel limitation on capital operations, that is, to make the ruble formally fully convertible. For a genuinely convertible ruble, that is not enough. Demand for the ruble from nonresidents is still necessary, foreign banks need to open ruble accounts and the ruble has to be used in foreign trade accounts. There is no evidence of that happening yet.
www.kommersant.com
All the Article in Russian as of Apr. 17, 2008
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Photo: Ïàâåë Ñîëîâüåâ
