Bank of Russia sets differentiated required reserve ratios depending on foreign currency

To promote changes in the composition of credit institutions’ foreign currency liabilities towards a higher proportion of friendly states’ currencies, while maintaining the conditions for a further overall decrease in the share of foreign currencies on banks’ balance sheets, beginning on 1 April 2023, the Bank of Russia introduces differentiated required reserve ratios for liabilities in unfriendly states’ currencies or other foreign currencies to be complied with by all credit institutions:

7.5% — for all categories of reservable liabilities in unfriendly states’ currencies; and

5.5% — for all categories of reservable liabilities in foreign currencies (except liabilities in unfriendly states’ currencies).

The amount of liabilities of banks with a basic licence in unfriendly states’ currencies is taken equal to zero.

The new required reserve ratios are to be first applied to required reserve amounts for April 2023.

Other required reserve ratios remain unchanged.

To update the procedure for calculating required reserves taking into account the new ratios, beginning on 1 April 2023, the Bank of Russia also establishes coefficients for operations with a credit institution — central counterparty (CI-CC) applicable to liabilities of credit institutions participating in repos and deposit transactions with centralised clearing in foreign currencies:

0.05 — for liabilities in unfriendly states’ currencies; and

0.2 — for liabilities in foreign currencies (except liabilities in unfriendly states’ currencies).

The new coefficients for operations with a CI-CC are to be first applied to credit institutions’ required reserve amounts for April 2023.

The coefficient for operations with a CI-CC applicable to liabilities in Russian rubles remains unchanged (0.2).

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