RUONIA benchmark interest rate
RUONIA (Ruble Overnight Index Average) is the weighted average interest rate on overnight interbank ruble loans (deposits) reflecting the cost of unsecured overnight borrowing.
The RUONIA rate is based on the reporting of major banks compiled according to Form 0409701 ‘The foreign exchange and money markets transactions report’ submitted by credit institutions to the Bank of Russia in compliance with Bank of Russia Ordinance No.
RUONIA is one of risk-free interest rate benchmarks used for the monitoring and analysis of the efficiency of achieving the operational objective of the Bank of Russia’s monetary policy. The pricing of several financial instruments, such as loans, bonds and derivatives, is linked to RUONIA.
RUONIA is currently administered by the Bank of Russia, which is fully in charge of all the stages of this process, including RUONIA methodology, compilation of the list of contributor banks, data collection, and calculation and publication of the interest rate.
RUONIA was launched as a result of joint efforts of the Bank of Russia and the National Foreign Exchange Association in 2010 in response to the need for up-to-date information about the state of the ruble money market during the
Before 2020, RUONIA was administered by SRO National Finance Association or SRO NFA (before 2015: the National Foreign Exchange Association which joined SRO NFA in 2015). The Bank of Russia performed the functions of the settlement and publication agent.
Money market interest rates, comprising RUONIA among others, serve as important indicators of the transmission mechanism of the monetary policy of central banks targeting inflation. By way of managing banking sector liquidity, central banks seek to keep money market rates close to the key rate of the central bank (key rate). Sustainable maintenance of market rates close to the key rate intensifies the main signal of the monetary policy, improves its predictability for market players’ management of their liquidity and, eventually, increases the working efficiency of the overall interest channel of the transmission mechanism of the monetary policy.
The Bank of Russia conducts daily monitoring of the situation in the money market using, among other things, information on the level of RUONIA rate and its deviation from the key rate.
Following the revealed instances of manipulation of the benchmark rate setting mechanism for LIBOR, international organisations and G-20 member countries decided to change the foundations of pricing in the financial markets. The reform was launched in 2014. It implies the revision of the methodology governing the setting of benchmark interest rates in reserve currencies, and also the introduction of specialised regulation of the activities of administrators of benchmark indicators. In the course of the reform, the parties switched from the overall use of indicative rates to rates based on actual operations. As a result, LIBOR rates were replaced by new national risk-free interest rates administered by central banks, specialised index companies, information and analytical agencies and exchanges.