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Offshore piggy, Bank themes of the day 15.08.2018 at 21:00

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American analysts claim that in order to reduce the effects of the sanctions, Russia sold off US Treasury bonds. Country led them to safe offshore territory. Really?

In the middle of June, the market has received a signal that the Russian regulator does not expect anything good from the trump and actively redistributes reserves. The U.S. Treasury has unveiled the statistics on investments in us Treasury bonds. US Treasuries are among the most liquid and safe assets, the Central banks around the world are buying them for the formation of a "safety cushion". But Russia is still in the spring dropped from the list of the largest holders of U.S. debt, announced the American Ministry of Finance. From March to may the volume of investments decreased by 84%, falling below $ 15 billion.

the Head of the Central Bank Elvira Nabiullina called this "diversification of reserves," however, American experts believe otherwise. Private organization "Council on foreign relations" (CFR) suggested that Russia dropped not all us bonds. Part of the funds moved to Belgium and Cayman Islands.

Follow up

in March 2018, the Bank held US Treasuries on 96.1 billion. In may investments amounted to 14.9 billion But the reduction does not mean total sales, according to experts of the CFR. US Treasury data reflect only transactions with long-term Treasury bonds. For two critical months, Russia has sold such securities only at $ 35 billion. The currency revaluation, as well as unrecorded transactions with other foreign intermediaries are "dissolved" in the calculations 8-10 billion But what happened to the other 38 billion dollars?

experts of the CFR say that in other jurisdictions, including offshore. In April — may the possession of the US national debt has increased significantly in Belgium and the Cayman Islands — 25 billion and $ 20 billion respectively. This more than covers the "missing" amount.

This coincidence is, indeed, alarming, said General Director of "Sputnik — asset management" Alexander Losev. "Belgium has become a major buyer of U.S. obligations. While its GDP is not comparable with the indicators of countries that possess comparable share of Treasury bonds", — said the expert.

in addition, the last five years the Central Bank of Belgium was systematically reduced investment in US Treasuries by about $ 35 billion.

to Transfer attachments to a safer jurisdiction is technically possible. "One option is the creation of a special legal entities and entering into the authorized capital of assets", — says partner Paragon Advice Group Alexander Zakharov. The expert also recalled the experience of the Soviet Union in such operations: then holders of many foreign securities are often had special foreign trade enterprises and not the state Bank.

what this?

meanwhile, the sides of the do not see direct economic benefits from displacement of U.S. government bonds in other jurisdictions. Hide investments in US Treasuries was partly pointless.

"Is a paper dollar. All participants in these operations, banks, financial intermediaries can identify the beneficial owners of the asset. It's not such a big challenge for us Supervisory authorities. The only way — to execute all persons that have nothing to do with Russia — neither nationality nor residence", — said the lawyer of tax practice of consulting "FBK Right" Dmitry Paramonov.

Such an operation also cannot be considered good protection from sanctions. Experts doubt that the U.S. Treasury may prohibit the Russian Central Bank to keep the Treasury bonds. It will simply deter the Central banks of other countries.

the Logic there can only be political, says Alexander Losev. "At a time when Washington calls Moscow political opponent, increase the military budget, to Finance spending at the expense of Russian foreign exchange reserves is wrong," he says. Reports of withdrawal from US Treasuries can be viewed as a strong political gesture. While dollar reserves to the exporting country need in case of economic instability.

Even if the Central Bank has drastically reduced investments in us government bonds, after the sale, he received the currency. And for its movement can be understood if the Russian regulator to distance itself from the dollar. However, data on foreign exchange reserves will arrive soon. Information disclosed with a delay of six months. Last time the Bank reported on the structure of the reserves in September of last year. It turns out that the following report is unlikely to shed light on the events of this spring.

the Distance from the dollar in numbers

the Maximum level of investment securities in US treasuries peaked in the year 2015 — 176 billion. Since then, the Russian regulator is sometimes sold US Treasuries, but since the end of last year, this trend was sustainable. The Bank of Russia does not pay attention to the increase of yield in April and may, the rate on ten-year commitments reached a peak in seven years.

the Last statistics of the Bank of Russia also shows that in the structure of international reserves of Russia increased the share of currency and deposits. YTD growth in these segments is 61 billion dollars.