Citibank Russia Sees Surge in Foreign Currency

(Bloomberg) -- Citigroup Inc.’s Russia unit gained more foreign currency holdings from retail depositors than any other bank during the ruble’s crash in August.

Clients’ foreign currency current account holdings increased by 17 percent month on month to the equivalent of $1.4 billion, according to Bloomberg calculations based on data provided by the lender. That was the largest net gain among the 10 banks with the biggest foreign currency holdings in the country, according to Frank RG calculations.

Citibank Russia Sees Surge in Foreign Currency

“The growth of funds placed in foreign currency retail current accounts was primarily due to clients diversifying their portfolios against a backdrop of volatility on the currency market,” Dmitry Emelin, head of Citibank’s banking products department, said through a company spokesperson.

The ruble fell about 7.5 percent against the dollar in August -- its worst month since April -- amid fears that the U.S. Congress would enact the “bill from hell.” The proposed law could ban dollar transactions at some state banks and bar Americans from buying new issues of state debt.

Russians reduced their foreign currency holdings at state banks in the month, moving some cash to foreign banks’ local units. The biggest outflow was at Sberbank PJSC, which lost 3.4 percent of foreign currency in retail accounts. VTB Group, Gazprombank JSC and Bank Otkritie FC also saw such deposits shrink. Rosselkhozbank JSC was the only state bank to gain foreign currency in the period.

Citibank saw cash holdings in rubles in its retail accounts decrease by 17 percent in August, according to the data obtained from the lender.

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