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How $300 Billion Of Russian Cash Can Disrupt Global Money Markets


Russia has nearly $1 trillion of liquid wealth, Credit Suisse strategist Zoltan Pozsar stated.

Russia nonetheless has about $300 billion of international forex held in offshore swaps — sufficient to disrupt cash markets if they’re frozen by sanctions or moved immediately to keep away from them.

That’s based on Credit Suisse Group AG strategist Zoltan Pozsar, who parsed knowledge from the Bank of Russia and monetary markets to calculate the determine. 

“When flows change, spreads can gap,” Pozsar wrote in a report Thursday. “If things escalate, it’s hard not to see a direct impact on FX swaps and U.S. dollar Libor fixings given Russia’s vast financial surpluses and where those surpluses are deployed.”

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Russia’s central financial institution and personal sector have nearly $1 trillion of liquid wealth, with a a lot bigger share of this held in U.S. {dollars} than most individuals understand, even after the nation offered all its Treasuries holdings in 2018, Pozsar wrote. He estimates about $200 billion is held in foreign-exchange swaps, with one other $100 billion in deposits at international banks.  

That’s a big sufficient quantity to considerably shift funding markets, based on Pozsar. The Bank of Russia’s U.S. greenback publicity is about 50%, in contrast with the 20% it reviews, Credit Suisse estimates.



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