CBR: Shrinking Foreign Currency Deposits

UrBC, Moscow, September 12, 2019. The Central Bank of Russia points to money flowing out of foreign currency deposits and flowing into ruble deposits in August, the CBR’s report on Banking Sector Liquidity and Financial Markets indicates.

According to the CBR, the foreign currency deposits went up on a considerably smaller scale in August compared with June and the previous twelve months on average. As a result, the yearly growth of private customers’ foreign currency deposits slowed down for the first time since October 2018 and came to 9.5% in late July. Based on the bank’s preliminary data, money was flowing out of foreign currency deposits and flowing into ruble deposits in August.

The CBR experts say the long-term deposits have been replacing the short-term ones even faster than before: the yearly increase in the number of over-twelve-month deposits accelerated from 13.6% to 14.9%, whereas the yearly increase in the number of under-twelve-month deposits slowed down from 2.6% to 1.8%.

In July, the yearly increase in the overall number of private customers’ deposits dropped down from 7.3% in June to 7.1% one month later.

The bank believes the increase in the number of long-term deposits might indicate the private customers’ wish to secure a certain interest yield on their savings for a longer term, given that banks keep gradually reducing the interest rate earnings they offer.


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