Page 90 - RusRPTSept23

Association, told the agency. - They have already depreciated greatly, simply because they were in Russia. A 5% loss in exchange rates is nothing compared to a 50% write-off.” An arbitrage opportunity arises whenever a country restricts the convertibility of its currency, recalls Francis Brendon, former head of FX market research at Lehman Brothers. “What is unusual in this case is the scale and the ease with which it was done,” he says.
The case demonstrates that even a hint of multiple ruble exchange rates leads to parasitic financial flows. How any serious attempts to artificially control the exchange rate of the national currency lead to a plurality of rates can be read here. Iran survived for many years under sanctions with three rial rates, but is getting rid of them as a source of corruption and rent without developing a real economy.
The Russian Central Bank and the Ministry of Finance consistently and successfully defend a floating exchange rate, and economists generally agree that exchange rate restrictions accelerate inflation more than even direct emission. But if last year, with shrinking imports and a good commodity market, there was no reason to talk about a multiple exchange rate, now it has arisen in the form of problems with the balance of payments.
8.0 Financial & capital markets Main indicators of Russian bank sector
Assets RUB mn
Jun 22
Jul 22
Aug 22
Sept 22
Oct 22
Nov 22
Dec 22
Jan 23
Feb 23
Mar 23
Apr 23
May 23
Jun 23
Assets net of loss provisions and income tax
116,14 9
120,31 1
121,36 7
121,41 1
124,15 9
125,02 1
134,81 8
137,55 3,885
134,48 2,847
139,91 7
140,74 8
143,97 8
147,16 8
Loans to corporates
50,088 ,000
52,227 ,000
53,345 ,000
54,230 ,000
56,094 ,000
56,618 ,000
59,096 ,000
60,086 ,175
58,456 ,722
61,642 ,000
63,120 ,000
63,670 ,000
65,273 ,000
Loans to individuals
25,573 ,000
25,825 ,000
26,103 ,000
26,514 ,000
26,775 ,000
27,093 ,000
27,438 ,000
27,836 ,410
27,571 ,456
28,330 ,000
28,817 ,000
29,401 ,000
30,008 ,000
Capital and financial performance RUB mn
Equity capital
13,713 ,979
13,489 ,201
Capital adequacy N 1.0, %
12.8
12.8
21
21
21
Provision for losses (including adjustment)
10,000 ,703
9,875, 486
RUSSIA Country Report September 2023 www.intellinews.com