On changing averaging ratio used to calculate average value of required reserves of credit institutions

The Bank of Russia Board of Directors decided, effective 10 September 2015, to raise from 0.7 to 0.8 the averaging ratio used by banks to calculate the average value of required reserves. For non-bank credit institutions that are authorised to take money on deposits and provide loans¹ the ratio will be raised from 0.7 to 1.0.

This measure is aimed at enhancing efficiency of a mechanism of averaging required reserves and expanding capabilities of credit institutions to manage their own liquidity. The said decision will result in redistribution of assets between accounts of credit institutions as regards accounting of required reserves and their correspondent accounts with the Bank of Russia, and will not impact greatly on credit institutions’ need for Bank of Russia refinancing operations.

The mechanism of averaging required reserves (in compliance with Bank of Russia Regulation No. 342-P, dated 7 August 2009, ‘On Credit Institutions’ Required Reserves’) enables credit institutions to keep their share of required reserves, not in excess of the averaging ratio, with their Bank of Russia correspondent accounts on the average throughout the averaging period.

¹ The averaging ratio for non-bank settlement credit institutions, non-bank credit institutions authorised to make account-free funds transfers and other related banking operations is kept at 1.0.

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