Is Russian Central Bank moving towards yuan?
The Russian Central Bank has included the Chinese yuan on the list of the currencies used for investments of gold and foreign exchange reserves, however in the near future it does not plan to make operations on purchase of the assets nominated in yuans, two sources familiar with the situation said.
The Central Bank publishes information about reserves with a half-year lag. According to the third quarterly report of the regulator for the current year, on December 31st 2014 the share of the US dollar in the structure of Russian reserves reached 44%, the euro – 42%, the pound sterling – 9.5%. The Canadian and Australian dollars, the Swiss franc and the Japanese yen are also being used in the reserves.
According to one of the sources, the yuan was included on the list in mid-November. Both sources said that the Bank of Russia has not yet exercised any purchases of yuan. In addition, the share of the yuan in reserves will be low and, in fact, will have a symbolic character, TASS reports.
The head of the program 'Russia in the Asia-Pacific region' of the Moscow Carnegie Center, Alexander Gabuev, told Vestnik Kavkaza that the currency reserve basket should be diversified. "Because the yuan has a large share in the world trade calculations, its inclusion in the currency reserve basket is expected. Moreover, it is the currency of the second-largest economy of the world in general. When this happens officially, the Central Bank and other banks will start to invest in yuan tools to diversify and hedge their investments," he believes.
"Firstly, now may not be the best moment for it, as the yuan has not yet been included in the currency reserve basket of the IMF, although it will be there in the future. Secondly, the yuan has been devaluing since the summer, and there are substantial reasons to expect that the devaluation will continue. That is, for example, if you spend 60 rubles to buy 10 yuans, you will lose some rubles, so it will be easier to wait for the moment when the devaluation expectations subside," the economist noted.
The deputy chairman of the State Duma Committee on Financial Markets, Anatoly Aksakov, also stressed in an interview with Vestnik Kavkaza that the Chinese economy is the first economy in terms of purchasing power. "According to forecasts, in the near future it will be more than the US economy at par. We need to diversify the currency reserve basket in order to minimize the risks associated with fluctuations in other currencies," he said.
"At the first stage the share of the yuan in the basket will be about 5%, and then, following the liberalization of the currency legislation of China, it will increase. After the yuan is included in the reserve basket of the IMF, its value will immediately increase. However, the Russians shouldn't invest in the yuan now, only if you are going to go to China," Anatoly Aksakov warned.