Four local banks with exposure to NT$5 billion (US$178.44 million) in Russian bonds expect more losses after the bonds’ ratings were downgraded due to sanctions against Russia following its invasion of Ukraine, the Financial Supervisory Commission (FSC) said yesterday.
Some of the Russian bonds held by local banks are Russian government bonds, whose yields rose from less than 5 percent in January to 19 percent last month.
As yields and bond prices move in opposite directions, rising yields would lower the prices of bonds.
If the banks determine that the Russian bonds are likely to default, they would need to book more