Page 94 - RusRPTJan23

7.1 FX issues
The share of international settlements and payments in currencies other than the dollar and the euro moved up from 21% to almost 50%, the Bank of Russia said in its Financial Stability Review. "The buildup of payments in alternative currencies is associated with inherent difficulties - infrastructure should be created to this end (the system of correspondent accounts, methods of messages transmission, the infrastructure of currency exchange transactions - via the exchange or on the interbank market, and so on). Such infrastructure is being developed at present,” the CBR said.
Around half of trade between Russia and China is already conducted in national currencies, Russian Prime Minister Mikhail Mishustin said on Monday at a video conference meeting with his Chinese counterpart Li Keqiang on December 5. Over the ten months of the current year, mutual trade increased by almost a third and approached $150bn.
India will start to use the rupee in transactions in second week of December, according to citing Federation of Indian Export Organizations (FIEO) Director General Ajay Sahai. “A number of issues have been sorted out. Exporters and importers have begun approaching banks for opening of the accounts," Sahai told the news daily. An anonymous government official said that six Russian banks opened 10-11 Vostro accounts with IndusInd Bank.
For almost half a year, the ruble exchange rate was unusually stable for the current shock circumstances - from mid-July to early December, the dollar only rose in price above 62 rubles and fell below 60 a few times.
The strong ruble reflected a sharp drop in imports due to sanctions and the withdrawal of Western companies, while a sharp increase in exports against the background of rising oil prices and oil and gas sanctions that did not work well in the first months. The government tried to beat the unfavorable budget rate, but did not achieve success. However, analysts believed that by the end of the year the dollar would rise in price to 70-75 rubles - and in December this is still happening.
From December 1 (rate 60.78 rubles / $) to the present moment (70.2 rubles / $ by Friday close), the ruble has lost 15.5% against the dollar, or almost 10 rubles. At its peak, the drop exceeded 17%. The lion's share of the fall occurred in just six trading sessions - from December 15 to 22, the dollar rose from 63 to 71.2 rubles.
Against the euro, the ruble depreciated even more during the same time - by 19.6% since December 1 (from 63.3 rubles / € to 75.7 at the close on Friday). The dynamics of the ruble against the Chinese yuan is approximately the same
94 RUSSIA Country Report January 2023 www.intellinews.com