Russia's Central Bank to provide banks with 2.5 billion Yuan in currency swap transactions

The Central Bank of Russia announced on Friday that it had facilitated currency swap transactions amounting to 2.5 billion Chinese yuan ($346.25 million), equivalent to 31.8 billion roubles.

In response to market dynamics, the central bank disclosed adjustments to currency swap operation rates for yuan sales effective from March 25. 

Additionally, it revealed plans to double the maximum daily volume of currency swap operations to 20 billion yuan on select trading days to mitigate excessive volatility.

The move comes after banks' heightened demand for yuan swaps, with February 29 witnessing the utilisation of the entire 10 billion yuan limit.

Introduced in January 2023, the currency swap program between yuan and roubles has gained traction, with last year's total operations amounting to 59.7 billion Chinese yuan, as per the bank's report.

While assuring the adequacy of liquid reserve assets to sustain financial stability, the central bank emphasised the limitations surrounding diversification into assets of "unfriendly" countries due to associated risks. 

(With Reuters Inputs)