Factors affecting banking sector liquidity

Factors affecting banking sector liquidity

Definitions
(Factors affecting banking sector liquidity)

The graph shows the contribution of the factors, described below, to the change of the banking sector liquidity, represented by the correspondent account balances of credit institutions with the Bank of Russia, per day.

Change in cash in circulation (outside the CBR) reflects the change in cash, issued by the CBR, excluding cash in the CBR cash vaults. The sign “+” denotes a decrease of cash in circulation, the sign “-” denotes an increase of cash in circulation.

Change in general government accounts with the CBR and other items net reflects the change in general government accounts with the CBR (federal, subfederal and extrabudgetary funds) and other items net. The sign “+” denotes a decrease of balances in the accounts, the sign “-” denotes an increase of balances in the accounts.

Change in required reserve accounts with the CBR reflects the change in required reserves deposited by credit institutions with the CBR including the change as a result of reserve requirements revision. The sign “+” denotes a decrease of reserves, the sign “-” denotes an increase of reserves.

CBR interventions on the domestic FX market reflect the net purchase/sale of the foreign currency by the CBR at the domestic FX market. The sign “+” denotes a net purchase of foreign currency by the CBR, the sign “-” denotes a net sale of foreign currency by the CBR.

CBR net operations to provide and absorb liquidity (excluding interventions on the domestic FX market) are calculated at the end of the day as a net worth between the change in the CBR liabilities to the banking sector and the change in the CBR claims on the banking sector on the current day. In addition, CBR net operations include net purchases/sales of securities through the CBR secondary market operations without the obligation of a reverse sale/purchase.

The sign “+” denotes a supply of liquidity to the banking sector, while the sign “-” means a withdrawal of funds by the CBR.

The change in the CBR liabilities to the banking sector is calculated as an amount of funds to be paid back by the CBR to credit institutions on the current day under deposit operations and through the redemption of outstanding CBR bonds net of the amount of funds attracted by the CBR via deposit operations and through the CBR bonds allotment with the settlement date on the current day.

The change in the CBR claims on the banking sector is calculated as an amount of funds to be paid back by credit institutions to the CBR on the current day under repo and currency swap operations and through the redemption of CBR loans net of funds provided by the CBR through repo, currency swap operations and loans with the settlement date on the current day.

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