The head of a major Russian financial institution, Andrey Kostin, told President Vladimir Putin in a meeting that lending to Western-currency borrowers has stopped at VTB. The bank is shifting its focus toward ruble-denominated loans and is gradually expanding operations in yuan and other currencies, as reported by TASS.
“Today, we do not lend in Western currencies. There is no such option at the moment. We are seeing a growing share of ruble loans, and we are steadily building activity in yuan and other currencies,” Kostin noted.
He added that roughly half of the bank’s agreements with partner nations now involve rubles, reflecting a strategic realignment toward countries that prefer non-Western settlement currencies.
In September 2022, Kostin indicated that VTB was evaluating the possibility of lending to corporate clients in yuan, with several projects already in development. In a Reuters interview in June, he suggested that the era of the U.S. dollar maintaining unquestioned primacy could be approaching its end, citing geopolitical shifts that push many countries toward settlements outside the dollar and the euro. He also mentioned that China is moving to ease currency restrictions, and VTB was discussing yuan usage in transactions with third countries.
VTB’s press service reported that in the first half of this year, customers opened around 14,700 deposits in Chinese currency, totaling about 6.7 billion yuan. The overall yuan-denominated deposit portfolio reached 10.4 billion yuan, surpassing the level at the start of the year by more than a third and a half, underscoring growing demand for yuan savings and investments among clients. The bank’s actions illustrate a broader trend toward diversification away from traditional Western currencies and toward a more multi-currency approach in international finance.
Analysts note that this trajectory aligns with efforts by various governments and financial institutions to reduce reliance on the U.S. dollar as global trade and capital flows increasingly incorporate alternative currencies, with China playing a central role in these developments. Observers caution that while such shifts take time to mature, the momentum in currency diversification is tangible and continuing to shape lending, deposits, and settlement practices across the banking sector. For VTB, the move toward rubles and yuan represents both a strategic risk management choice and a response to evolving geopolitical and economic realities. (citation: TASS)
In related remarks, some observers have called for patience as the market adjusts to these changes, noting that the transition from a dollar-dominated system to a multi-currency framework involves complex regulatory and operational steps. The ongoing dialogue among central banks and financial institutions around currency cooperation suggests that the shift is not a sudden rupture but a gradual evolution in how international finance conducts settlements, loans, and asset preservation across borders. (citation: Reuters)
Ultimately, VTB’s approach reflects a broader climate in which banks adapt to the shifting sands of global finance, embracing rubles and yuan as part of a diversified, resilient strategy for international banking and cross-border commerce.