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Russian central bank lends more Chinese yuan in currency swap operations

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MOSCOW: Russia’s central bank said it provided banks with 2.5 billion Chinese yuan ($346.25 million) equivalent to 31.8 billion rubles on Friday through currency swap operations.

The bank announced last week that it was adjusting currency swap transaction rates for yuan sales starting March 25.

It said it was also increasing the maximum daily volume of currency swap trading from 10 billion yuan to 20 billion yuan on the first two and last two trading days of each month to reduce excessive volatility.

Peak bank demand for yuan swaps was recorded on February 29, when the entire 10 billion yuan limit was used.

The central bank launched yuan and ruble swap operations in January 2023. The total amount of currency swap operations last year was 59.7 billion Chinese yuan, according to a bank report.

The bank also said its liquid reserves were sufficient to maintain financial stability and carry out necessary operations.

The possibilities for further diversification of reserve assets into currencies and financial instruments of “hostile” countries are limited by the risks inherent in these currencies and economies.

These factors predetermine the key role of the Chinese yuan in the formation of reserve assets, the bank said.

($1 = 7.2203 Chinese yuan renminbi)

($1 = 92.5705 rubles)

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