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On fine-tuning operations to absorb liquidity

14 February 2014
Press release

Starting from 17 February 2014, the Bank of Russia will include in its monetary policy instruments system fine-tuning operations to absorb liquidity, which will be conducted in the form of 1- to 6-day deposit auctions with maximum rate equal to the Bank of Russia key rate.

The Bank of Russia will announce its decision to conduct a fine-tuning deposit auction, along with its term, maximum amount of funds to be deposited with the Bank of Russia following the auction results, and other parameters no later than 10:00 a.m. on the auction day. The deposit auctions will be held using Reuters Dealing and MICEX Electronic Trading System. Funds will be deposited with the Bank of Russia following the outcome of deposit auctions on the day of transaction.

Fine-tuning deposit operations are designed to absorb excess liquidity whenever liquidity supply, formed by autonomous factors, significantly exceeds banking sector demand for it. In the case of excess demand, the Bank of Russia will conduct liquidity-provision fine-tuning operations (see information notice ‘On the Procedure for Conducting Fine-Tuning Operations’). These instruments are aimed at preventing the excessive volatility of money market rates in case of considerable liquidity fluctuations.

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