CBR Stakes On REPO
Past week’s records in REPO deals have made the Central Bank of Russia, CBR, even more optimistic. The bank crisis in the West helps it set up a full-fledged system of refinancing, said CBR Deputy Chairman Konstantin Korishchenko. It also improves efficiency of inflation fighting, the analysts speculate.
CBR proceeds with its effort to step up the liquidity amount available to the banks. On Friday, for instance, it funneled 192.2 billion rubles into the bank system via REPO auctions. But that figure could be compared to interventions of the Bank of Japan. Taken for a week, the amount of transactions to credit banks against securities was roughly 650 billion rubles. According to CBR Deputy Chairman Konstantin Korishchenko, the liquidity crisis in the West led to the failure in the system of financing Russia’s banks in foreign exchange.
CBR will have to proceed with the money supply at least all this week, the most optimistic analysts forecast. Meanwhile, in CBR, they intend not to limit REPO operations but rather bring additional momentum to them. “Practically in any country, refinancing in national currency is effected continuously. Here, the system is just emerging,” Korishchenko pointed out.
And last but not least, some analysts say the global liquidity crisis is advantageous to CBR, as it helps fight inflation. The ruble liquidity has narrowed materially, while some time ago, CBR hardly managed to control it because of the powerful flow of money.
www.kommersant.com
All the Article in Russian as of Aug. 27, 2007
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