April 25, 2018 / 2:04 PM / a year ago

Number of Russians converting currency quadrupled after new U.S. sanctions, VTB says

MOSCOW (Reuters) - Russia’s second-largest bank VTB (VTBR.MM) said on Wednesday it saw a fourfold increase in the number of Russians converting currency after new U.S. sanctions earlier this month led to a collapse in the value of the rouble.

FILE PHOTO: A cashier places 5 rouble coins into a counting machine at an office in Krasnoyarsk, Russia, January 22, 2016. REUTERS/Ilya Naymushin/File Photo

Washington imposed fresh sanctions against Moscow on April 6 in response to alleged Russian meddling in the 2016 U.S. election and other “malign activity”.

The new round of penalties triggered a sell-off on Russian markets, pushing the Russian rouble to its weakest levels versus the dollar since late 2016 [nL8N1RV213].

VTB Deputy Chairman Anatoly Pechatnikov said the increased market volatility had been alarming.

“The total volume of cash and non-cash currency-exchange operations increased by four times to $200 million a day in Russia, in all our branches,” he said.

Pechatnikov did not say whether the transactions were to convert foreign currency into roubles or roubles into foreign currency.

The number of transactions peaked between April 9-11, he said, when the rouble slid by more than 10 percent against the dollar to its weakest since November 2016.

The Russian central bank has said ordinary Russians are increasingly using swings in the value of the rouble to sell and then buy back foreign currency in order to make money.

Pechatnikov said he believed that was the cause of the increase in exchange transactions.

“I don’t rule out that this activity was related ... with new opportunities which appeared for savvy and active currency market participants, they simply used this opportunity to enrich themselves,” he said.

Reporting Elena Fabrichnaya; Writing by by Polina Nikolskaya; Editing by Jack Stubbs, Larry King

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