Russians held around $14 billion in U.S. securities at end-March - central bank

© Reuters. FILE PHOTO: National flag flies over the Russian Central Bank headquarters in Moscow, Russia May 27, 2022. REUTERS/Maxim Shemetov/File Photo

(This content was produced in Russia where the law restricts coverage of Russian military operations in Ukraine)

MOSCOW (Reuters) - Almost one third of around 3 trillion roubles ($49.1 billion) worth of foreign securities held in Russians' accounts at the end of March were U.S.-issued, Russia's central bank said in a report on Friday.

Many Russians bought foreign shares in a retail investment boom sparked during the COVID-19 pandemic, using accounts now frozen under Western sanctions imposed after Russia sent its troops into Ukraine on Feb. 24.

Central Bank Deputy Chairman Philip Gabunia has said more than 5 million people in Russia have foreign stocks in frozen accounts, with a combined value of more than 320 billion roubles.

At the end of March, U.S. securities accounted for 855.3 billion roubles ($14 billion), or 27% of all foreign securities, which includes bonds as well as shares, the central bank said. Issuers from the United Kingdom accounted for 464.8 billion roubles and Irish issuers for 308.9 billion.

The next four countries in terms of volume were Luxembourg, Cyprus, the Netherlands and the Cayman Islands.

"In total, securities from 120 countries are on individuals' accounts," the bank said.

The total volume held increased in 2021 as Russian exchanges launched trading in ever more foreign securities, but the central bank said the deteriorating geopolitical backdrop was reversing that trend this year.

The central bank has proposed banning Russians with holdings worth less than $550,000 from buying foreign shares, as a step to protect investors. SPB Exchange, the country's second-largest bourse, has suggested clients' U.S.-listed shares be transferred to a non-trading account due to restrictions imposed by Brussels-based depository Euroclear.

Seeking to minimise future risks for retail investors, Russia's central bank has already reduced the maximum leverage they can use.

($1 = 61.1250 roubles)