Forex Outflow Develops In Russian Banks. Sberbank and VTB banks, the two largest state-owned banks in Russia, both experienced strong outflows of foreign currency deposits. The deposits occurred as the ruble is experiencing depreciation. There are also worries that new sanctions imposed by the United States could harm the ruble. The development has caused the value of the ruble to drop when compared with other currencies, although that drop is more pronounced surrounding the American dollar than it is with other currencies.
The outflows come as the value of the ruble has dropped dramatically in recent time. The RUB/USD pair is listed at 0.015 at this moment. The pair was closer to 0.0178 at the early part of the year. But the drop in the value of the ruble became more pronounced during the early part of August as the currency quickly dropped by 0.001 in value, one of the sharpest to come along.
The drop is among the lowest values for the ruble in recent time. This is especially minimal when compared with the original value of 0.030 that the pair had in 2014. The decline in the RUB/USD pair is the largest that the currency has experienced in recent time and is expected to influence how the pair is traded in the future.Advertisement
The outflows of forex deposits in Russia comes as the United States may potentially add new sanctions. Many of Russia’s state-owned banks would be at risk of being harmed by the development of new sanctions. Part of this comes amid the United States’ interest in trying to reduce the Russian influence in many functions within the field.
The foreign currencies that people hold in Sberbank have dropped in value by about a billion dollars. The total has gone down to $33 billion in August. The corporate FX deposits fell by $2.2 billion down to $55 billion. Much of this is due to both the demand for currency during the summer holidays and the worries about new American sanctions. People had been taking out their currencies during this period.
Not all banks in Russia have experienced such declines in their forex values. Rosselkhozbank, another prominent state-owned bank, saw its corporate FX deposits increase in recent time. The deposits rose in value to $6.38 billion at the end of August. There was an increase of $160 million in the value of the deposits.
In terms of its relationship with other currencies, the ruble has experienced a slight drop, although that drop is not as intense as what was experienced in the United States. The RUB/GBP pair saw a quick decline this week from 0.01168 to 0.01145. The sudden drop ends a bull period where the value of the currency pair had been rising. The pair was down to 0.01089 at the start of September and had experienced some periods of growth with the value staying consistent for days on end throughout that month.
Details on the new sanctions that the United States would impose on Russia are unclear. There are beliefs that these sanctions would entail changes in trade actions or new taxes that may be imposed.