Yuan economy

The rates of major currencies on the Russian market fell back to the values ​​of two or three months ago. Thus, dollar quotes fell below the level of 57 rubles/$, euro – up to 55 rubles/€, yuan – up to 8 rubles/CNY. At the same time, activity is growing only in operations with the Chinese currency. The Moscow Exchange is launching new money market instruments to manage yuan liquidity. As market participants note, over time, a wider offer of hedging products may be required.

On Wednesday, September 28, the dollar exchange rate during trading on the Moscow Exchange reached 56.96 rubles / $, which is 1.5 rubles. lower than the previous day’s close. As a result of the trading session, the rate stopped near the mark of 57.54 rubles / $, the minimum close since July 22. The euro exchange rate in the course of trading decreased only by 1.15 rubles, to the level of 55 rubles/€, and closed at 55.475 rubles/€, the minimum since July 1. Trading in the Chinese currency closed at a minimum since June 30 – 8.02 rubles / CNY. The volume of trades in dollar with delivery “tomorrow” amounted to almost 121 billion rubles, a quarter higher than the result of the previous day. The volume of transactions with the euro amounted to 58 billion rubles, adding almost 50%. The volume of trading in the Chinese currency amounted to about 75 billion rubles, almost twice as high as the average values ​​a month ago.

High activity in the yuan is associated with the transition of companies in foreign economic activity to operations with friendly currencies.

According to Mikhail Shulgin, head of the global research department at Otkrytie Investments, as part of the de-dollarization of the Russian economy, business has been actively restructuring “to the east” in recent months and promoting the conclusion of contracts with settlements in yuan. Among exporters, the analyst cites such large companies as Gazprom, Rosneft, Rusal as an example. The high activity of the corporate segment is evidenced by large volumes of trades in swaps, which reflect the volume of currency remaining in bank accounts. This week, the average volume of one-day swaps in yuan exceeded 225 billion rubles. against 132 billion rubles. in dollars.

To support the growing demand for yuan, the Moscow Exchange is expanding its accompanying tools. On Monday, traders in the money market became able to trade in Chinese currency with clearing participation certificates (CPC), deposits with a central counterparty (CC), inter-dealer repo, and trades in the credit market. In addition, the terms for concluding transactions with settlements in Chinese yuan were increased: in the case of unaddressed repo transactions with the CCP – up to three months, in repo with GCC – up to one year, in inter-dealer repo and on the credit market – up to three years. The total volume of transactions for the first two days amounted to 205 million Chinese yuan, follows from the message of the exchange.

The new tools will be in demand by businesses and banks as part of the effective management of funds on accounts denominated in yuan. According to Mikhail Shulgin, businesses have “short money”, now they are often in yuan.

In the absence of proper tools for placement, they are forced to choose bank accounts on demand. As a result of the growth in the volume of yuan in the calculations of real business, banks have liabilities in foreign currency. “Excessive liquidity in the short and medium term requires tools to work with it,” says Philip Agrachev, head of the department for client operations in the financial markets of Sovcombank.

At the same time, it becomes possible to receive funding for purchased bonds. This, according to Mr. Agrachev, allows attracting short liquidity for long instruments. “The new instruments will make it possible to fill the market for bonds denominated in yuan with liquidity and increase the attractiveness of borrowing in yuan for other Russian companies,” Mikhail Shulgin believes.

However, to fully replace dollars with yuan, there are not enough tools for managing liquidity. According to the head of the analytical department of Zenit Bank Vladimir Evstifeev, for the purpose of hedging, derivatives market instruments, for example, medium- and long-term futures, should appear. “Setting the dollar exchange rate through the yuan is also possible, and in order to exclude arbitrage transactions, cross rates will probably not differ much from forex quotes,” notes Mr. Evstifeev. Options and bi-currency deposits in this currency will be interesting for business. “Cross-currency swaps will allow market participants to flip funding from rubles to yuan and vice versa,” notes Philip Agrachev.

Vitaly Gaidaev