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Business / Finance

Compulsion to ruble: Russia's sanctions against the us dollar

Banki.ru: themes of the day 13.08.2018 at 21:00

Banking and financial news on the website Banki.ru

Russian authorities want to reduce international payments in dollars. In the United States are preparing a new series of restrictions for Russian banks. What to expect for those who have savings in foreign currency and keeps them in jars?

"No problems with the foreign currency deposits of our citizens will not be"

In the case of the introduction of a new package of us sanctions foreign currency accounts of Russians in banks, noted Americans, will not suffer. This statement was made first Deputy Prime Minister, Minister of Finance Anton Siluanov.

"No problems with deposits — foreign currency or ruble — our citizens absolutely will not" — said Siluanov. The Minister promised that the Bank of Russia will take necessary measures to support victims of sanctions the credit institution. And in case of need "will strengthen its liquidity," the Bank is caught in a difficult position.

News

Siluanov also called the dollar "a risky tool for calculations," and suggested that it will be possible to sell oil for euros or national currency. "Despite the fact that oil is usually traded based on the dollar valuation, we can even fix the dollar equivalent, but to for oil supplies euros and other freely convertible currencies and, eventually, the national currency," he said.

the proposed U.S. senators the sanctions measure, which Siluanov said, is a ban on operations in the United States for seven Russian banks: Sberbank, VTB, Vnesheconombank, Rosselkhozbank, Gazprombank, Bank of Moscow and Promsvyazbank. These banks may lose the opportunity to conduct settlements in dollars through correspondent accounts in U.S. banks. It will happen if it passed a bill introduced to Congress six U.S. senators in early August.

if we are Waiting for forced conversion?

the Threat of new sanctions against Russian banks caused a wave of discussions about what can happen with foreign currency accounts of customers of these banks will not be whether the result of the forced conversion of the same dollar deposits into rubles.

Financial Advisor Natalia Smirnova tells about the currency risk for the customers of these banks. "I have translated the currency or not in other banks from the sanctions list, or would invest it in buying bonds, but not companies and banks which fall under sanctions," says a consultant.

According to the analyst of the company "ALOR Broker" Alexey Antonov, talking on the prohibition of payments in dollars in Russia — skillfully running rumors are working on the fall of the ruble.

"In my opinion, the rumors that Russia will ban the payments in dollars, is it really a rumor, cleverly launched on the market in order to capitalize on the fall of the ruble. Such tough sanctions will never be accepted because it means a direct confrontation between the two countries. This puts Russia in a desperate situation, and in such situations people start to act desperately. Direct conflict nobody wants, the US and Russia for decades it avoided and will avoid this time. The bad thing is that such rumors heated public sentiment. And now the big Bank has to issue a press release that the demand for foreign exchange operations has not increased. Panic trying to repay in all ways, including a simple verbal intervention. But how can I reassure people that saw the devaluation of his life already three times: in 1998, 2008 and 2014? Their feet run to the exchanger, and well, if this is an Internet Bank and not a real exchange, with its risks for the treatment with cash. Medvedev has called the actions of the US "economic war", and it's close to the truth, and investors start to get nervous when they hear the word "war" in any context," says Antonov.

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"Forced conversion was used during the crisis in Argentina in 2001, when the bill in dollars were converted back to pesos at the rate of 4 to 1, whereas for the ten years before the peso to the dollar was set as one-to-one — reminds the managing partner of the expert group Veta Ilya Zharskiy. Depositors thus lost about 75% of their deposits. They were just seized by the government due to the unfair exchange rate". In March of this year involuntary conversion held the largest private Bank in Latvia Rietumu. Customers encouraged to change the base currency of service from dollars to euros, the remainder in dollars of the funds were converted automatically. Its decision, the Latvians explained that "maintaining the functionality of payments in U.S. dollars may be difficult because of the reputational problems of the Latvian banking system."

"the Probability of an outright ban our banks dollar-denominated operations is extremely low"

Experts believe that in modern Russia such a development of events is impossible.

"in Imposing sanctions, the US don't aim to hit ordinary Russian citizens. Their goal is political and economic pressure on the leadership of our country. Even if we consider that there will be restrictions on dollar operations of state-owned banks, for individuals will be provided with a mechanism for avoiding the negative effects of the blocking transaction. For example, there may be a grace period to conduct the necessary translations. On the whole, the probability of an outright ban our banks dollar-denominated operations is extremely low," says investment strategist "BKS the Prime Minister" Alexander Bakhtin.

"in practice, such a forced conversion is not likely to be necessary even if the banks can not return the Deposit in foreign currency, the courts will certainly be to award in favour of clients of the payment in Russian rubles. So expect the return of the Deposit in the equivalent amount in rubles. Prohibition of operations on correspondent accounts in the United States may result in the inability to be affected by the prohibition of banks of payments in dollars," explains senior associate Herbert Smith Freehills Denis Morozov.

it is Unlikely that Bank customers will face a situation when it is not able to obtain its own currency, says the Deputy Chairman of the Board Loko-Bank Andrey lyushin.

"you can Always transfer the currency in cashless form in another Bank, which is under sanctions did not get. This can be done within the country and in terms of sanctions. In addition, it is possible to withdraw funds at the current rate. In principle, such contributions already, and now there are some banks, for example under a multicurrency format, especially when it comes to more rare currencies (the yuan, pound, franc). The customer enters the amount in rubles at the rate they are enrolled as a suitable currency and then removed in the form of the ruble exchange rate. So until then, until there was a revocation of a license, the reasons for forced conversion of money in a private Bank there," soothes the lyushin.

According to Alexei Antonov, banks could have foreseen such an outcome. So each of them could conduct the corresponding training. "For example, back in February, PSB began to try the options in the context of the prohibition on transactions in dollars. One of the ways is an attempt to continue to service the accounts in dollars, with individual changes in the contract. There will be a measure to transfer the account into rubles to make payments, but how this mechanism will technically circumvent the sanctions until it is difficult to describe," says Antonov.

"New sanctions in case of their introduction will, rather, be selective and relate to individual segments of the economy. So there is no reason to panic and mass requests for withdrawal of funds from the state banks" — sums up Alexander Bakhtin.

Anna PONOMAREVA, Banki.ru