Russian Central Bank to increase yuan swap rates substantially as of Sep 16

MOSCOW. Sept 13 (Interfax) - The Central Bank of Russia plans to change interest rates on currency swap transactions for the sale of yuan for rubles with their subsequent purchase as of September 16, 2024, the regulator said.

Rates on yuan will increase substantially. They will be set at the Overnight Shanghai Interbank Offered Rate (O/N SHIBOR), increased by 12 percentage points (ppt, currently +5.5 ppt).

The rate for calculating the swap difference for rubles will continue to be calculated as the key rate of the CBR, reduced by 1 ppt.

"This decision was reached by taking into account the current price trends in the currency swap segment and is aimed at minimizing the impact of the CBR's operations on market pricing," the regulator said.

The CBR previously advised banks to reduce the foreign currency predominance of assets, including limiting the growth of foreign currency lending, in order to stabilize the situation on the currency market under the current sanctions. "The Bank of Russia currency swap operations cannot be a tool for funding foreign currency assets, but serve as a stabilization mechanism in the context of short-term surges on the domestic currency market," the CBR said earlier.

There has recently been a shortage of yuan liquidity, which has led to an increase in rates on instruments in this currency and a rise in the yuan exchange rate against the ruble.