The Bank of Russia has announced plans to conduct a fine-tuning repo auction on March 27, 2025. This initiative aims to improve liquidity management for credit institutions and ensure that overnight money market rates remain close to the key rate. The auction will be conducted in two legs, with the first leg taking place on the auction day and the second on March 31, 2025.
The maximum allotment amount for this auction will be determined on March 27, 2025. Details regarding the schedule and parameters of the auction will be available on the Bank of Russia's website under "Schedule for Repo" and "Repo Auction Announcements."
As liquidity surplus is expected to gradually diminish by mid-2025, giving way to a structural liquidity deficit, some credit institutions may experience increased demand for liquidity faster than others. The end-of-March period typically sees high annual taxes payable to the budget, which could lead to short-term fluctuations in banking sector liquidity and significantly impact individual banks' demand for funds.
In response to these changes, the Bank of Russia plans to shift from one-week auctions aimed at absorbing liquidity to those providing funds during this transition period. This adjustment is anticipated even before the persistent structural deficit fully materializes.
The Bank of Russia remains committed to monitoring banking sector liquidity closely. This vigilance allows them to adjust their operations accordingly, maintaining money market rates near the key rate.
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