On aggregate limits on Bank of Russia forex operations

In recognition of a steadier domestic foreign currency market, the Bank of Russia has decided that effective 1 January 2018 the aggregate limit on foreign currency refinancing operations (repo transactions and loans) be reduced and the formerly established limit for ruble funds under foreign exchange swaps cancelled.

The not-to-exceed amount of credit institutions’ debt to the Bank of Russia under foreign currency repo transactions and loans shall be the equivalent of $15 billion for 2018. As the domestic foreign currency market evolves towards normalisation in line with the forecast, the Bank of Russia reduces this amount in a consistent manner. Between October 2014 and 2017, this aggregate amount was the equivalent of $50 billion; it totalled $25 billion in 2017. Since November 2017 to date, there has been no debt of credit institutions on these operations. The new limit reflects the Bank of Russia’s willingness to resume these operations should the need arise, to maintain financial stability.

The Bank of Russia further decided that effective 1 January 2018 no ceiling will be set on the amount of ruble funds on foreign exchange swaps (since 19 December 2014 to date this ceiling amount has been the equivalent of $10 billion). The decision is grounded in sustained stability in the domestic foreign currency market against the background of a structural liquidity surplus when most credit institutions see no need for ruble funding from the Bank of Russia.

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