Central Bank of Russia borrowed about 18 billion at a repo auction
2022.12.05 08:29
Central Bank of Russia borrowed about 18 billion at a repo auction
Budrigannews.com – As the government borrows heavily at OFZ treasury bond auctions, Russian banks raised 1.1 trillion roubles, or $17.71 billion, at repo auctions held by the central bank on Monday. This demonstrates sustained demand for cash.
At a one-month repo auction, the central bank was offering 1.5 trillion roubles and 100 billion roubles, respectively. 100 billion roubles and one trillion roubles were each raised by banks. Auctions known as repo, or repurchase agreements, assist banks in managing their liquidity.
Recently, the finance ministry has been offering OFZ bonds at high premiums and has already exceeded its quarterly borrowing goal by more than 11 times.
The high repo limits may be the result of active OFZ offerings, according to analysts.The finance ministry sold an unprecedented 823 billion roubles worth of government debt on a single day in the middle of November.
The record debt issue was cited by the British Ministry of Defence as evidence that Russia was borrowing to maintain its defense spending.
As Russia diverts funds to support its military campaign in Ukraine, rising spending on domestic security and defense is likely to reduce funding for schools and hospitals in the coming year.
OFZs, a significant source of financing for budget deficits, are primarily purchased by Russian banks, who then use them as collateral in liquidity transactions with the central bank, including repo.
According to the most recent information, banks acquired 70% of the OFZs offered by the finance ministry in January.
According to the central bank, banks purchased approximately half of the 215 billion roubles in OFZ rouble bonds that the finance ministry issued in October.
Since October, the finance ministry has used OFZ auctions to raise nearly 1.7 trillion roubles.In just the past week, it has raised 219.57 billion roubles.
($1 = 62.3000 roubles)
