RUONIA Index and Averages
For floating-rate financial products, such as loans and bonds, the Bank of Russia suggests using RUONIA Average as an indicator.
The two products have been developed:
- RUONIA Average value for one, three and six months;
- RUONIA compounded index, using which market participants may calculate on their own interest rates for any (non-standard) reference periods.
|1-month RUONIA Average
|3-month RUONIA Average
|6-month RUONIA Average
RUONIA Index and Averages are calculated for each day based on RUONIA (using the compounded interest formula on business days for which RUONIA was calculated, simple interest formula is used for weekends and days, for which RUONIA was not calculated) and published on the Bank of Russia website on the RUONIA calculation days after the publication of RUONIA.
Methodology for producing and publishing RUONIA and Methodology for Calculating and Publishing the RUONIA Index and Averages (Ruble Overnight Index Average) were officially approved by the Bank of Russia.
RUONIA Average has economic sense as final yield is measured based on the results of daily overnight reinvestment. The issuer (borrower) pays the actual cost of money which has evolved in the market over the previous interest period.
The use of RUONIA Average helps smooth out yield fluctuations and avoid shocks of the money (foreign exchange) market, as well as one-time changes of the Bank of Russia key rate. RUONIA Average also helps issuers and borrowers avoid the effects of volatility in short-term interest rates. At the same time, serving as nominal anchor, it manages the banking sector liquidity. The regulator stabilised RUONIA value on a daily basis within an interest rate corridor, thereby ensuring the predictability of its movements. Accordingly, the application of RUONIA in operations with assets and liabilities makes it possible to minimise the basis risk, as interest payments on claims and liabilities are closely correlated.
In 2020, the Bank of Russia conducted an international audit confirming the compliance of RUONIA with the requirements of the International Organization of Securities Commissions.
In the Bank of Russia, control over the compliance with the international requirements is vested with the RUONIA Oversight Committee. RUONIA is characterised by low operational risk.