Before the sanctions, the Central Bank increased the placement of funds in foreign banks

Last year, deposits in foreign banks accounted for one fifth of the net assets of the Russian regulator.In 2021, this balance sheet item increased by more than 40%

The balances of the Bank of RUSSIA on correspondent accounts and deposits opened with foreign credit institutions at the end of 2021 amounted to 10.9 trillion rubles, follows from the annual report of the regulator (.pdf). Over the year, the volume of placed funds increased by 3.3 trillion rubles, or by 42.6%. This is one fifth (20.8%) of the net assets of the Central Bank, which exceeded 52.4 trillion rubles as of the reporting date.

The total investments of the Central Bank in foreign currency were estimated at 32.5 trillion rubles, or $437.3 billion at the rate used in the reporting to assess assets. Approximately two thirds of this amount - 21.2 trillion rubles. are purchased securities of foreign issuers. The rest (with a few exceptions) is money on correspondent accounts and deposits.

Net debt of banks to the Central Bank against the backdrop of Western sanctions exceeded ₽5 trillion Finance

As noted in the reporting, the Central Bank's trading portfolio (which forms part of the regulator's gold and foreign exchange reserves) mainly includes government bonds of CHINA , France, Germany, Great Britain, Austria, CANADA, as well as non-government securities guaranteed by foreign governments. In 2021, this balance sheet item decreased by 4.8% precisely due to a decrease in the volume of investments, and not a revaluation of the cost or exchange rate differences, follows from the report of the Central Bank.

On the contrary, the Bank of Russia increased the balances on correspondent accounts and deposits abroad. The regulator does not provide data on the distribution of funds by country, but indicates that this article includes not only deposits placed in the national banks of the countries of the Eurasian Economic Union. According to reports, in local currencies, and not in dollars, the Central Bank had correspondent accounts only in Armenia, Belarus, Kazakhstan and Kyrgyzstan - a total of 935 million rubles. (0.86% of the total amount of funds on accounts and deposits abroad), however, over the year, the Central Bank increased placement in local currencies by 2.4 times.

After the start of Russia's military operation in Ukraine, the foreign exchange reserves of the Central Bank fell under the sanctions of the United States , the European Union, Great Britain, Canada, Australia and Japan. This means freezing the assets of the Russian regulator abroad and in the currencies of these countries - we are talking not only about investments in securities, but also funds on accounts and deposits.

The West decided to freeze the assets of the Bank of Russia. What is important to know Economics

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As follows from the reporting, in 2021 the income of the Bank of Russia from foreign accounts and deposits decreased. Excluding the requirements of the Central Bank to the IMF, they amounted to 12.8 billion rubles, which is 41.1% less than in 2020. In general, the regulator ended last year with a loss of 26.3 billion rubles, which is more than half the negative financial result in the pandemic 2020. The Central Bank has not shown net profit for five years, since 2017. This is due to the situation of a structural liquidity surplus (when Russian banks keep more money on deposits of the Central Bank than they borrow from it), as well as large-scale spending on the resolution of large private banks that took place in the second half of 2017.