MOSCOW: Russia’s third biggest bank moved almost $7bn to the central bank as tension over Ukraine rose in March and joined others in slashing its deposits in foreign banks where they could be frozen if more international sanctions are imposed.
The movement of funds by Gazprombank, revealed in data published by the central bank, means that at the beginning of April its foreign currency on deposit at the central bank dwarfed those of other major Russian banks.
It was “quite a unique event”, Maxim Osadchy, banking analyst at Moscow-based BKF Bank, said, noting Gazprombank hardly ever used that account for foreign currency operations. “This could show that Gazprombank was using the foreign currency correspondent account at the central bank as a sort of haven from sanctions.”
Gazprombank declined to comment. The currency move was part of wider actions by Russian banks to repatriate funds to Russia, lowering their exposure to the risks of possible wider Western sanctions over the Ukraine crisis, analysts said.
Monthly accounts available on the central bank website show that during March, Gazprombank increased the foreign currency held at its correspondent account with the central bank from zero to 248bn roubles ($6.9bn). This represented the bulk of the $8bn that Russian banks added to such central bank accounts as a whole, Raiffeisenbank analysts calculated.
It was not clear where other banks put their money or why they did not use their central bank accounts. Banks’ total forex investments at home and abroad fell by around $24.5bn, central bank data shows, suggesting that much of the funds went to meet large public demand for dollars and euros. Only one Russian bank has so far been targeted by US sanctions, but some US senators have recently called for sanctions against both state gas producer Gazprom, the bank’s founder and minority shareholder, and other major banks.
The US government has warned that more sanctions may follow within days if Russia does not take steps to defuse the situation in eastern Ukraine.
The accounting data show that from the beginning of 2007 until last month Gazprombank had only used the central bank account for significant forex operations at the height of the global financial crisis from January to March 2009. At that time it deposited 90 billion roubles in foreign currency for a short period. Between September 2009 and January 2010, two deposits worth just 1,000 roubles each were paid back a month later. Reuters
