Analyst Osadchy explained the interest of Russians in “non-toxic” currency: deposits increased 50 times

“If on April 1, 2022, the share of non-toxic currencies, mainly in Chinese yuan, in the amount of foreign currency deposits of individuals was only 0.4%, then on January 1 of this year it reached 22.9%,” says the analyst.

A particularly sharp increase occurred in December last year, when the amount of deposits in non-toxic currencies increased by $2.3 billion, he notes.

At first glance, everything seems logical. Last year, the ruble exchange rate was very stormy, and inflation, especially food inflation, made itself known loudly. And in order to preserve their savings, Russians were looking for a more reliable “currency haven” – not to invest in toxic dollars or euros! Just look, the authorities will completely ban their circulation in Russia with all the ensuing consequences.

Although in fairness it should be noted that no one prohibits opening accounts in dollars or euros. Thus, according to the Central Bank, last year 51 banks offered deposits in dollars, even more than in 2022, when 48 credit institutions offered such services.

But to shift so sharply, with an increase tenfold, into unusual currencies, even the appearance of which few ordinary people had previously imagined, it is unlikely that any analyst expected such agility from their compatriots.

– How can we explain the sharp increase in deposits in non-toxic currencies in December? – we ask the author of the calculations, Maxim Osadchy.

“This excitement remains a mystery to me,” he answers. – Indeed, the amount of deposits in non-toxic currencies (mainly the yuan) increased by $2.3 billion in December. While the toxic currency decreased by almost the same amount – $2.1 billion. It turns out that at the end of the year the population was actively transferring deposits in toxic currency to non-toxic ones.

– What do the statistics say for previous months?

– In November 2023, deposits in non-toxic currencies increased by 0.3 billion, in toxic ones they fell by 0.2 billion. In October of the same year, deposits in non-toxic currencies increased by only $4 million. And in toxic ones they decreased by 0.64 billion. So, the December surge stands out from the general series.

A more significant increase in deposits in non-toxic currencies occurred only in September 2022. Then deposits in non-toxic currencies increased by $3 billion, while deposits in toxic currencies immediately fell by 10 billion.

– As I understand it, there is no clear trend in the foreign exchange market? Confusion and vacillation?

– On the contrary, there are quite stable trends. One of them is the devaluation of deposits. Over the past year, they – toxic and non-toxic – decreased by 23.8%, or by $13.1 billion, to 41.9 billion.

– Probably for the reason that at the current bank rate it is more profitable to have ruble deposits?

– Not only. The main reason is the restrictions imposed by the Central Bank on foreign currency deposits, in force since last spring, regardless of their “toxicity”.

– What are they?

– The document “Measures of the Bank of Russia to stabilize the situation in the financial market in the context of the implementation of sanctions risks” states: “Citizens can open new foreign currency accounts and deposits, but it will be possible to withdraw investments from them in rubles. Payments to individuals from foreign currency deposits in the event of receipt of foreign currency from September 9, 2022 are carried out without restrictions at the bank’s exchange rate.” That is, you open a deposit in foreign currency, and receive it in rubles, and at the internal (read arbitrary) rate of the bank. Therefore, while such restrictions are in effect, it is unwise to keep deposits in foreign currency in Russian banks. And, in particular, this is why Russians’ deposits in foreign banks are growing.

– Let’s clarify: let’s say, if I close my account in yuan, then I will receive it in rubles, and it’s not clear at what rate?

– For now, this restriction is in effect until March 9 of this year. But, most likely, it will be extended, each time for six months, several more times.

– Some banks still accept deposits in dollars and euros. But there is probably no profitability on them?

– You can find more or less decent ones, up to 3.6%, both in dollars and euros. But, of course, on the market now you can find rates on deposits in rubles close to 20%.

– It is not clear why the dirham, the currency of the United Arab Emirates, is not particularly valued in our country. A paradise in the desert, a favorite vacation spot for Russians… Is it less reliable than the yuan?

– The dirham is good for everyone, it is more stable than the ruble and yuan. For the reason that its exchange rate is pegged to the American dollar. But, alas, low liquidity.