Bank of Russia commentary on results of one-month repo auction

This result comes as no surprise to the Bank of Russia, confirming that the national banking sector’s current liquidity level is sufficient. Moreover, factors behind liquidity movements have been gradually normalising since mid-May. This helps ensure the banking sector enjoys liquidity which is more evenly distributed and more predictable for a number of credit institutions. Money market rates have held close to or slightly below the key rate.

The Bank of Russia will continue holding its long-term repo auctions consistent with the previously released schedule as it does not rule out a rise in uneven distribution of liquidity across the banking sector while the overall structural surplus is set to remain sustainable. As it stands, this instrument adds to market players’ confidence in the availability of options to obtain liquidity if need be; the instrument will also enable credit institutions to put in place a more flexible system of their liability structure management, while they retain the potential to restructure current and issue new long-term loans.