Despite the increase in the number of currencies available for sale in the Russian Federation in cash, banks talk about high demand for dollars. You can even buy exotic currencies right now, but it is dollars that can be exchanged in many countries. Demand for foreign currency traditionally increases during the holiday period, but now interest is fueled by the strengthening of the ruble. Moreover, small banks whose work is not limited by sanctions are becoming serious players in this market.
Sberbank this week began selling Thai baht in cash. As a result, in general, the credit institution now offers 18 currencies for sale and there are no plans to expand the list. As Sergei Shirokov, director of the “Borrow and Save” department, explained, preparing for this is “a rather complicated process, not quick.” The bank notes demand for currency “mainly from tourists, usually for limited volumes.”
In 2022–2023, a number of banks, against the backdrop of problems with the circulation of the dollar and euro, restrictions on the travel of Russians and the ban on the validity of cards of international systems in the Russian Federation, began trading in unusual currencies of friendly countries, for example, UAE dirhams. Sberbank now sells around Dh20-30 million per month. At Sovcombank, the cash dirham ranks first in terms of turnover among friendly currencies, says Mikhail Avtukhov, deputy chairman of the bank.
Among the friendly currencies on the Russian banking market, for example, the Turkish lira and the Chinese yuan are also available. “However, the real demand for cash in exotic currencies from tourists is still insignificant – the dollar can still be exchanged in any country,” says Eduard Lushin, deputy chairman of the board of SDM Bank. “Great demand remains for US dollars, despite the wide range of currencies,” confirms the operating director of Ingosstrakh Bank, Yuri Stepkin.
According to the results of the first quarter, the increase in the volume of foreign currency in cash in the hands of the population amounted to 56.6 billion rubles, while for the entire 2023 it decreased by 71 billion rubles.
According to the Central Bank, as of April 1, in ruble equivalent, citizens had almost 9 trillion rubles in their hands. cash currency (1.7 times less than cash rubles).
“Current demand is also due to the dynamics of the foreign exchange market – people react to the decline in exchange rates relative to the ruble and seek to purchase cash currency at favorable exchange rate,” notes the PSB. However, on May 29, the ruble fell sharply after twelve sessions of strengthening against the dollar, clarified BCS World of Investments expert Dmitry Babin.
“Large banks with a fairly large number of clients and counterparties may try to introduce new types of friendly currencies to the market, but the fundamental point remains the volume of demand from the population,” notes Eduard Lushin. In this case, the bank’s office becomes a conversion center, explains Sergei Shirokov: as a rule, cash currency is not purchased, this process is difficult under sanctions, clients are sold mainly those volumes of currency that the bank itself bought from other clients.
Thus, banks sell currency based on its availability.
In September 2023, the Central Bank lifted the main restrictions for banks on selling currency to the public, recalls the FG analyst “ Finam” Igor Dodonov, in particular, credit institutions can sell banknotes that arrived at their cash desks before April 9, 2022. But data to estimate the volume of cash in banks is currently unavailable. At the beginning of 2022, it was about $13.5 billion.
Serious competition for a number of large players working with currencies now comes from small banks (including outside the top 100). As Mr. Dodonov explains, unlike most leading banks, small credit organizations are still largely not under sanctions. Therefore, they may have multiple sources of currency to sell. Firstly, this is the currency that is sold by individuals, secondly, the funds that citizens bring for transfer abroad, and, finally, from other sources, including possible transactions with non-residents and exporters.
There are already “many small banks on the market for which currency purchase and sale operations have become a significant part of their business. They offer clients a larger range of currencies than some large banks – not only dollars, euros and yuan, but also several dozen others,” notes Yegor Lopatin, director of the corporate ratings group of the NKR agency. According to the expert, this business may remain in the hands of small players in the future.
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