CBR reports shift in structure of banks' balance sheets in favor of 'non-toxic' currencies

MOSCOW. May 12 (Interfax) - The structure of Russian banks' balance sheets has seen a shift in favour of the currencies of friendly countries, the Central Bank of Russia (CBR) said in a report on financial market risks released Thursday.

The share of funds in friendly countries' currencies in forex liabilities to individuals and legal entities has grown from 4% to 11% and from 18% to 32%, respectively, since last September.

Lenders' liabilities to individuals and legal entities in "non-toxic" currencies also grew in absolute terms, the CBR said.

Forex lending has also shifted in favour of friendly countries' currencies since the fourth quarter of 2022 amid the growth of the share of liabilities in yuan. Such loans made up about 16% or the equivalent of $19 billion of all forex loans as of April 1, 2023, the CBR said.

Demand for long-term lending in the currencies of friendly countries is growing, but at this point banks are placing a substantial portion of corporate and retail yuan deposits in liquid assets. Funds placed in deposits and correspondent accounts at non-resident foreign banks make up 35% or the equivalent of $13 billion of the total $36 billion.