Russian stock market ends 2019 on a positive note
December 2019 was positive for the Russian stock market amid the general growth of risk appetite owing to a constructive trend in trade negotiations between the US and China and a higher likelihood of the approval of the Brexit deal. These are the findings provided in the latest issue of the Banking Sector Liquidity and Financial Markets commentary.
Structural liquidity surplus went down driven by an increase in the amount of cash in circulation and balances of banks’ correspondent accounts, which exceeded the amount of funds received through the budget channel.
The spread between interbank lending rates and the Bank of Russia key rate widened on the back of the expected key rate cut at the meeting of BoR Board of Directors. Interest rates in the FX swap segment stayed close to interbank lending rates as the banking sector’s foreign currency liquidity remained at a comfortable level.
In the fourth quarter of 2019, interest rates on banking operations mostly declined; in November, mortgage rates reached their new all-time low. At the same time, the average rate on long-term ruble loans rose due to the growing number of corporate borrowers. In November, activity in the retail segment of the credit market continued to slow down. Consumer lending was the main contributor to the slowdown of retail loan portfolio growth.