On FX loans secured by a pledge of claims on FX loans

On 23 December 2014, the Bank of Russia Board of Directors took a decision to introduce a new instrument — FX loans secured by a pledge of claims on FX loans. This decision aims at expanding credit institutions’ possibilities to manage their own FX liquidity, as well as to refinance external FX loans of Russian exporters, which are soon to be redeemed, given a restricted access to international capital markets. The introduction of the said operations will also be conducive for the exchange rate to return to its fundamental values and to the achievement of demand-and-supply balance in the forex market amid lower exchange rate volatility.

The said operations will be effective until 1 January 2018. The earlier set total maximum amount of credit institutions’ debt to the Bank of Russiaequivalent to US$ 50 billion applies to FX repos and FX loans secured by a pledge of claims on FX loans and remains intact. This limit can be increased if necessary.

Credit institutions with equity capital no less than 100 billion rubles as of 1 December 2014 will be included in the list of Bank of Russia counterparties on FX loans secured by a pledge of claims on FX loan agreements.

The Bank of Russia will provide auction-based FX loans for terms of 28 and 365 calendar days with the minimum interest rate set at the level of LIBOR in the respective currencies and for comparable terms increased by 0.75 percentage points. Claims on FX loans (in US dollars and euros) provided to large Russian export companies will be taken as a pledge on these operations. The currency of Bank of Russia loans should correspond to the currency of the pledge.

Information on other parameters of FX loans secured by a pledge of claims on FX loans and an interim procedure for transactions will be additionally placed on the Bank of Russia website.

The reference to the Press Service is mandatory if you intend to use this material.