Headquarters of the Central Bank of Russia (CBR), Moscow
Photo: Yury Martyanov
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Market On the Watch for Budget Money
When it comes to the banking market, the situation with liquidity remains tense there. The rates for interbank credits have climbed above 7 percent – MosPrime reached 7.13 percent Friday. The liquidity calculated as the total of the correspondent accounts and deposits of the banks with the Central Bank of Russia (CBR) is also below the comfortable level. It was just 592 billion rubles Friday.
But the CBR is defiantly calm in this environment, proceeding with injecting huge amounts under the direct repo transactions – mostly the one-day credits given against securities and at the rate of 6.03 percent to 6.7 percent. The repo auctions that were traditionally declared abortive from March to the first half of August, have been held daily (but for weekend) since August 15.
At the same time, the peak of repo transactions coincides with the peak of tax payments, i.e. is registered at the end of each month, while the start of the month shows quite different dynamics.
And another thing, on rumors of impending crisis, the nation tends to keep more cash rubles on hand. So, the duration of October peak in repo transactions and liquidity tension depends not only on Finance Ministry’s success in shelving the cash execution of costs deferred to the year-end (the so-called budget curtain), but also on the ability to win back the nation’s confidence in banking system. Its sign will be the end of all talks about the future bank crisis.
www.kommersant.com
All the Article in Russian as of Nov. 06, 2007
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