Starting April 15, 2025, the Bank of Russia will shift from deposit auctions to one-week repo auctions. This decision comes amid an anticipated further decline in structural surpluses, transitioning the banking sector towards a liquidity deficit, and aligning with the current demand structure in the money market.
The repo auction set for April 15, 2025, will adhere to the planned schedule. The initial leg is slated for April 16, 2025, with the second leg following on April 23, 2025. The upper limit for allotment during the auction will be determined on April 15, 2025. Details regarding the schedule and auction parameters can be found in the "Schedule for Repo" and "Repo Auction Announcements" sections on the Bank of Russia's website.
Should there be notable changes in liquidity dynamics or an uptick in banks' requests for the Bank of Russia's standing lending facilities, the institution may need to adjust, either supplying or absorbing liquidity. In cases where a decision is made to conduct a one-week deposit auction instead of a repo auction, the Bank of Russia will announce it on their website no later than the business day before the auction. The institution's goal remains to conduct either one-week repo or deposit auctions to manage market liquidity requirements.
The structure of the Bank of Russia’s monetary policy instruments will stay the same. This means banks will retain access to all standing facilities for both providing and absorbing liquidity. Additionally, at the close of required reserve averaging periods, the Bank of Russia will continue to execute fine-tuning auctions as needed to assist banks in meeting mandatory reserve obligations.
The Bank of Russia will maintain surveillance over the Russian banking sector’s liquidity, using this data to recalibrate liquidity-providing and absorbing operations accordingly. Their objective is to align money market rates closely with the key rate and sustain active engagement in the interbank money market.
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