Russia raises funds for banks, forex market after invasion of Ukraine

People pass February 11, 2019 at the Central Bank headquarters in Moscow, Russia.

  • Russian ruble, Putin’s troops in Ukraine
  • Russian bank CB intervenes in forex market for the first time since 2014
  • Provides additional forex and ruble liquidity to banks
  • Finmin has released new OFZ bonds for the coming weeks
  • Anxiety tests show the financial market, and big companies are ready for punishment, Finmin said.

MOSCOW, Feb. 24 (Xinhua) – The Central Bank of Russia strengthened its banking sector with additional liquidity on the day the ruble was sent to Ukraine, after the ruble reached an all-time low and began selling foreign exchange.

After weeks of denying plans to attack neighboring Ukraine, Russian forces fired rockets at several Ukrainian cities and landed on the coast on Thursday.

The United States has promised to impose tougher sanctions on Moscow, including the activities of Russia’s largest banks and the energy sector. Read more

And as Russian currency, bonds and stocks were all tanks, For the first time since Russia joined the Crimean peninsula from Ukraine in 2014, the Central Bank has intervened in the Fox market.

It is unknown at this time what he will do after leaving the post.

“The military campaign in Ukraine imposes severe sanctions,” Rifenbank said in a statement. “The ruble risk has been halted by the intervention of the central bank, but its potential for further weakening remains high.”

The regulator may have spent between $ 1 billion and $ 2 billion in support of the ruble on Thursday, analysts at Promzzazbank said. The Central Bank will announce the total on Monday.

It also raised $ 5 billion in daily exchange with Forks Bank, another 874 billion rubles ($ 10 billion) in daily repo bidding and 300 lenders options to raise additional funds.

As a precautionary measure, Russian lenders will bring in $ 5 billion in foreign currency bank notes in December, and last month added liquidity to their foreign exchange reserves. Read more

The state-owned Sberbank (SBER.MM) and VTB (VTBR.MM) both said their operations would continue as usual on Thursday, but the latter urged their corporate clients to refrain from trading in dollars and euros. Read more

Several Muscovites have struggled to withdraw dollars and euros from ATMs in the city center, and a cash machine in northeastern Moscow has been shut down after a 20,000-rubbish pay off.

But there were no major ATM queues in Moscow on Thursday.

Government Promises Control

Russian officials say Moscow’s financial shield is strong enough to withstand volatility and sanctions, but new sanctions “weaken Russia’s economic base and modernization,” said Ursula von der Leyen, head of the European Commission. Read more

Russia grossed $ 120.3 billion last year, with gold and foreign exchange reserves recorded at $ 643 billion, less than 20 percent of GDP.

“Russia has the financial resources to maintain its financial system in the face of sanctions and external threats,” the government said on Thursday, with an additional budget of more than 4.5 trillion rubles. Read more

“The financial market and large companies are fully prepared to implement them,” the statement said. He did not provide details.

However, a Moscow real estate company on Thursday warned its employees to use cards created by Western Visa and MasterCard payment systems as an alternative to cards related to the local MIR payment system.

“We recommend that all our employees use their payroll system to transfer their cards to this card,” the letter said, adding that the decision to open such cards in Sberbank, VTB and AlfaBank should be taken to the end. day.

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