Page 111 - RusRPTJul22

8.1.3 Deposits
Funds of legal entities increased significantly (RUB859bn, or +2.2%), mainly from companies in the oil and gas industry. Both ruble balances (RUB425bn) and currency balances ($6.1bn, or RUB434bn in ruble equivalent) grew. This significant inflow could be largely driven by high commodity prices and higher revenues for exporters.
Funds of the population in May increased by RUB257bn. (+0.8%), while foreign currency balances grew more actively than ruble deposits (currency: $2.2bn, or RUB159bn in ruble terms; RUB98bn), especially if we take into account that part of the ruble of the left inflow is associated with social payments for children, which began on May 1 (the total amount of allocated funds is RUB363bn).
The increase in foreign currency placements of individuals is likely due to the conversion of ruble funds against the backdrop of a significant strengthening of the ruble against the dollar and the euro, as well as a decrease in rates on ruble deposits. Thus, the average maximum rate on them decreased by more than 3 percentage points, to 9.84%, in the third decade of May compared to the third decade of April.
The valuation of deposits creates additional risks for banks, since in order to balance their foreign exchange position, they must buy currency and place it, risking a “freeze” when sanctions are extended. Therefore, banks may try to reduce the volume of their foreign exchange transactions, including refusing to offer foreign exchange products to customers, although some are acting too radically by setting higher commissions on existing accounts.
The increase in funds on escrow accounts decreased significantly and amounted to RUB38bn, or 1.0% (in April: RUB113bn, +3.1%), against the backdrop of low demand for housing in the primary market, which is indirectly confirmed by enough low mortgage rates.
State funds increased by RUB691bn. (+7.9%), which, among other things, allowed banks to reduce their debt to the Bank of Russia by RUB512bn (-13.8%).
111 RUSSIA Country Report October 2020 www.intellinews.com