Central Bank of Russia will not increase limit on yuan swaps due to increased demand for liquidity; market already coped with similar situation

MOSCOW. March 20 (Interfax) - The Central Bank of Russia does not intend to increase the limit on yuan swaps due to increased demand for liquidity; such situations have already occurred and the market has coped with them.

"As for the increased demand for yuan, we have no intention of increasing the limits," Central Bank of Russia Governor Elvira Nabiullina said at a press conference on Friday.

Deputy CBR Governor Alexei Zabotkin recalled that a "much more dramatic" situation in the yuan swap market occurred in September 2024, and the market coped with it. "We remind you once again that our swap instrument does not assume that we are obliged to maintain the cost of yuan liquidity at some predetermined level," Zabotkin said.

Interest rates on short-term loans in yuan exceeded 20% per annum this week for the first time since November 2024. A significant reduction in foreign currency supply from the Central Bank is exacerbated by its still limited inflow from exports, BCS analysts said.