Bank of Russia resumes one-month repo auctions (18.11.2024)

From 25 November 2024 through 3 March 2025, the Bank of Russia will hold one-month repo auctions weekly in accordance with the approved schedule.

The conditions and main parameters of the auctions remain unchanged. Credit institutions that have master agreements concluded with the Bank of Russia will be able to take part in the auctions. The minimum interest rate is set at the level of the key rate plus 10 basis points. If the key rate changes, the interest rate on concluded repos will change by the same amount. Federal government bonds as well as bonds of constituent territories of the Russian Federation and municipalities with the highest credit rating will be accepted as collateral.

The decision to resume one-month repo auctions has been taken due to the expectations of a more uneven liquidity distribution among banks, caused by growing fiscal flows at the end of the year. Budget operations are characterised by a time gap between the accumulation of revenues, offering of government bonds and incurrence of expenditures. The provision of funds by the Bank of Russia under reverse transactions as part of one-month repo auctions will redress these temporary imbalances.

The maximum amount of funds to be provided at each auction will be determined based on the current and forecast liquidity situation in the banking sector. The Bank of Russia expects the demand for these transactions to reach its maximum level at the end of 2024. Starting from February 2025, the regulator plans to gradually reduce the amount of funds to be provided at each auction, which will result in the debt under these transactions dropping to zero by the end of 2025 Q1.