Not a single dollar

Not a single dollar

Irina Badmaeva

Chinese yuan, Turkish lira, Indian rupees, Armenian drams, Azerbaijani manats – banks are increasingly offering to open deposits in these currencies. This will help offset the volatility of the ruble. However, in order to use such financial products, the benefits and risks must be clearly understood.
Found an alternative
The issuance of currency in cash was limited. You can withdraw no more than ten thousand dollars from your account. The rest is in rubles at the market rate on the day of the operation.
But there is an alternative – deposits in the currency of countries that did not impose sanctions. For example, yuan is accepted at VTB at one percent for a period of three months to six months.
Approximately the same in the bank “Solidarity”, the Asia-Pacific Bank, BBR Bank, SDM-Bank. And in Alfa-Bank – and through a mobile application.
You can make a deposit in Azerbaijani manats, Belarusian rubles, Kazakhstani tenge, UAE dirhams, Turkish liras, Armenian drams.
Money was stored not only in dollars and euros before: in British pounds, Swiss francs, Japanese yens, the same yuan. But a large amount was required to open an account. Now it’s different. Due to geopolitical tensions, currency cash restrictions, banks and their clients are looking for alternatives.
Most often, they prefer the yuan – one of the world’s reserve currencies, second only to the dollar, euro and pound sterling in popularity.
In January, the share of the yuan in international settlements exceeded three percent, according to SWI-FT reporting. Confidence in the Chinese currency is growing, as China is the second economy in the world, adding eight percent to GDP in 2021. And inflation in February is 0.9 in annual terms.
“Investments in yuan are especially relevant for diversifying savings. The world is increasingly doing without the dollar and the euro. Moscow intends to transfer gas trade with “unfriendly countries” into rubles. Saudi Arabia is starting to sell oil directly for yuan,” explains Nikolai Pereslavsky, an employee of the department economic and financial research CMS Institute.
Demand is also high for the cards of the Chinese payment system UnionPay, the source of RIA Novosti adds. Relations between Moscow and Beijing are almost cloudless. This is how people draw conclusions.
Weigh seven times – then open a deposit
But there is no need to rush to shift everything into yuan, analysts warn. China may also fall under sanctions – additional external pressure is not ruled out.
“Before opening a deposit in Chinese currency, you need to find out about the possibilities and conditions for converting into rubles,” says Ksenia Artemyeva, COO of the Fast River fintech platform.
And don’t forget about inflation eating into profitability. A prime example is Turkey. At the beginning of 2021, seven liras were given per dollar. In Decem-ber – 17. As a result, inflation exceeded 36 percent.
Even in the US and EU, deposit rates have not kept pace with rising prices.
“Today, deposits in any currency are a way to simply save funds, not increase them,” says Nikolai Pereslavsky, an employee of the CMS Institute’s department of economic and financial research.
Analysts advise applying the golden rule of savings – do not store everything in one basket. Diversification eliminates exchange rate fluctuations. For example, part of the funds in yuan compensates for losses on more volatile ruble deposits.
With the currencies of the CIS countries, one should take into account the fact that they are strongly correlated with the ruble.
The main thing is to understand what exotic deposits are for. It makes no sense to open them out of pure curiosity. The main function of money is a means of payment or accumulation, experts remind. So, the yuan and the yen will be useful to entrepreneurs trading with Asia. Other alternative currencies may be needed on trips.
Don’t Forget the Ruble
Ruble should not be neglected either. Profitability in banks is now at its maximum. At the end of February, the Central Bank raised the key rate to a record 20 percent.
This was required by a “cardinal change” in the external conditions of the Russian economy, the regulator pointed out.
The US and the EU announced anti-Russian sanctions and froze half of their gold and foreign exchange reserves – about $300 billion. And now the Central Bank has fewer opportunities to feed credit institutions with money, to curb inflation. Therefore, in order to protect the savings of the population, we took an unprecedented step. “It is necessary to raise interest rates to levels that compensate citizens for increased inflationary risks,” said the head of the Central Bank, Elvira Nabiullina.
In addition, it was required to return the money to the banks. In just one day on February 24, the population and business withdrew 111 billion rubles from their accounts. Due to the hype, financial institutions faced a structural liquidity shortage.
And when the rates increased several times, people took the money back. “Now deposits in rubles are profitable – they compensate for inflationary risks. And since the stock market is highly turbulent, the bank is the most reliable and affordable instrument of accumulation in the short term,” Ksenia Artemyeva believes.
In the first ten days of March, the average maximum rate on ruble deposits in ten banks reached 20 and a half percent. The Central Bank is likely to continue to tighten monetary policy. That is, in April, deposits can become even more profitable.

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