Bank of Russia to hold fine-tuning repo auction on 27 March 2025

To enhance liquidity management by credit institutions and to maintain the conditions for overnight money market rates to form close to the key rate, the Bank of Russia will hold a fine-tuning repo auction on 27 March 2025, with the first leg to be conducted on the auction day and the second one – on 31 March 2025.

The maximum allotment amount at the auction will be set on 27 March 2025. The schedule and parameters of the auction will be published on the Bank of Russia website in the sections Schedule for Repo and Repo Auction Announcements, respectively.

The liquidity surplus is expected to gradually contract and give way to a persistent structural liquidity deficit approximately in the middle of 2025. However, there are individual credit institutions whose demand for liquidity arises faster than that across the sector in general. Therefore, seasonally high annual taxes payable to the budget at the end of March may cause significant short-term fluctuations in the banking sector liquidity and impact individual banks’ demand for funds more substantially than usual.

During the transition to the structural deficit, the Bank of Russia will start holding one-week auctions to provide funds instead of one-week auctions to absorb liquidity. Demand for this may arise before the transition to the persistent structural deficit is completed.

The Bank of Russia will continue to monitor the banking sector liquidity to take this information into account when adjusting the amounts of liquidity-providing and liquidity-absorbing operations. The Bank of Russia’s purpose is to maintain money market rates close to the key rate.

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