"Trouble Has Been Brewing."
- 6.02.2026, 17:54
Russian banks are again facing a shortage of yuan.
The Russian banking system is again facing a shortage of Chinese yuan - the last significant foreign currency that continues to be traded on the exchange and is not under sanctions restrictions, writes The Moscow Times.
On Thursday, rates on overnight yuan loans unexpectedly skyrocketed on the Moscow Exchange money market: from 1%, they jumped to 16% per annum - the amount banks were willing to pay to borrow Chinese currency for one day. By evening, the rates slightly dropped to 8%, and Friday again rose to 10.8%.
The currency market began to appear signals of a "local deficit" of yuan, notes PSB analyst Denis Popov. To cover the shortage, banks for the first time since February 2024 applied for yuan loans to the Central Bank and took 3.65 billion yuan through currency swap operations.
The exchange rates of ruble-yuan swaps, although not high (0.5-1.5%), reached the maximums since November 2024, Popov points out. Liquidity in the yuan "clearly has problems", states economist Egor Susin: someone did not have enough Chinese currency and had to buy it from the Central Bank and the market.
The yuan's exchange rate against the ruble on Monday jumped by 2.1% to 11.31 rubles, but soon fell back to 11.15. What is happening indicates that the banking system has exhausted the excess yuan liquidity it has had over the past year and is becoming "more sensitive to fluctuations," Susin notes.
Market participants fear a rise in yuan problems before the Chinese New Year, when the main suppliers of Chinese currency - PRC banks - will go on a long weekend (February 15-23), Reuters writes. "The current fluctuations are quite likely related to import payments" ahead of the Chinese vacations, Susin notes.
How much currency exactly Russian banks hold is not reliably known. For almost two years, the Central Bank of Russia has not published detailed statistics on the currency balance of the banking system. As of March 2024 (the latest available data), banks had $263 billion in foreign currency assets, of which $48 billion was "cash and cash equivalents." At the end of December, according to Central Bank data, banks owed $185 billion to customers with foreign currency accounts. Of that, $137 billion was owed to legal entities and $44 billion to individuals.
A severe shortage of yuan on the Russian market occurred in mid-2024 - shortly after the Moscow Exchange fell under sanctions and was forced to stop trading in the dollar and euro. Yuan rates soared to 60% per annum and higher, but returned to normal after Donald Trump won the US election.