23 May 2023 14:09

VTB notes client demand for yuan instruments, proposing measures for developing partnership with China

SHANGHAI. May 23 (Interfax) - VTB is noting strong customer demand for yuan in lending, investment in bank deposits, bonds and equities, VTB chief Andrey Kostin said at a Russian-Chinese business forum.

He spoke about a number of measures that would promote cooperation with China. According to Kostin, it is necessary to make decisions to ensure transactions between Russia and China through secure channels, to improve a secure infrastructure for payments and settlements, completely abandoning the dollar and other "toxic" currencies. Seamless payment transactions for tourist trips should also be organized, Kostin said.

The development of the digital ruble should be completed as soon as possible and it should be rolled out, along with a digital yuan.

Furthermore, opportunities should be provided for convenient currency transfer for citizens and businesses of both countries, Kostin said.

He also said that Chinese banks should be more actively involved in co-financing large industrial and infrastructure projects in Russia.

The VTB chief said that the yuan deposit market in Russia should be developed, as well as yuan financial instruments made available to Russian investors in the Chinese stock market. "The last aspect, related to the possibility of using the Chinese national currency on a larger scale in the domestic Russian market, is especially important," Kostin said.

He stressed that the yuan has actually replaced the dollar for the Russian economy. "There is a significant and still unsatisfied demand for yuan liquidity from Russian companies and citizens. Let me remind you that the share of yuan in the structure of foreign currency savings of Russians is already 11%, although back in 2021 such deposits were not represented at all in the range of banking products," the VTB CEO said.

VTB's portfolio of deposits in Chinese currency is 9.3 billion yuan, and is up by almost 40% since the beginning of the year, the bank said in a statement. "We expect that the popularity of the Chinese currency will only strengthen in the coming years amid weakening interest U.S. and European currencies. This will also be facilitated by the growth of rates on deposits in yuan. According to our forecasts, in the year VTB's portfolio of such liabilities will double and reach 15 billion yuan," head of the lender's Savings department Natalia Tuchkova was quoted as saying in a VTB statement.