The Chinese Yuan has become one of the mainstream currencies internationally. According to data released by the Society for Worldwide Interbank Financial Telecommunication (SWIFT), since January of this year, the proportion of the Yuan in international payments has risen to fourth place, reaching the highest level in six years, and has successfully surpassed the Japanese Yen. Thus, the Yuan has become the world's fourth-largest currency for the first time.
As of now, China has signed currency swap agreements with the central banks of 40 countries, involving an amount exceeding 4 trillion Yuan. With the enhancement of China's comprehensive strength, the appeal of the Yuan is gradually increasing.
On March 9th, the Russian Foreign Trade Bank (referred to as "VTB") launched a Yuan deposit business, with the highest annual interest rate reaching 8%. The deposit threshold is very low, starting with just 100 Yuan, although some branches require a minimum of 500 Yuan. Regardless, the deposit threshold is very low.
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VTB was established in the 1990s, and its name suggests its main business, which is a bank serving foreign trade. However, on March 2nd, the European Union removed VTB from the SWIFT payment system, which will take effect on March 12th.
Subsequently, VTB introduced a Yuan deposit business, which will start on March 9th, attracting Yuan deposits with a high interest rate of 8%. This means that Russia will continue to increase its trade scale with China in the future. Data shows that in 2021, China-Russia trade exceeded 900 billion Yuan, growing by 26%, with imports from Russia exceeding 500 billion and exports to Russia exceeding 430 billion.
I believe that what attracts most people's attention is the "8% annual interest rate." To be honest, an 8% annual interest rate is considered a very high level. It is important to know that most domestic banks have a deposit interest rate of around 3.5%, and those that can break through 4% are very few, let alone an 8% high interest rate.
Taking the Industrial and Commercial Bank of China as an example, the interest rate for three-year large-amount certificates of deposit is 3.79%, and the interest rates of large banks such as the Construction Bank, Agricultural Bank, and Bank of China are basically maintained at around 3.5%-3.8%. State-owned large banks basically do not have deposit products above 4%, and the threshold for large-amount certificates of deposit is higher, starting at 200,000 or 300,000 Yuan.
To find banks with a deposit interest rate above 4%, one must go to local banks or small and medium banks. These banks often raise deposit interest rates to attract deposits. Of course, the higher the interest rate, the longer the deposit term, but the liquidity will be worse.
So, can we deposit in the Yuan deposit introduced by VTB? Many people must have started paying attention, after all, an 8% annual interest rate is very tempting. However, this is a foreign bank, and it is the first time such a deposit business has been launched, so overall, don't rush. It is necessary to understand clearly first.
From the announcement issued by VTB, deposits can be opened remotely through VTB Online or at VTB's offline business outlets, with a minimum starting amount of 100 Yuan. According to the published information, the high-interest deposit term is 3-6 months. No matter how high the interest rate is, as depositors, it is necessary to comprehensively consider risks and returns, do not follow blindly, and fully understand it is very necessary.