CBR Deputy Chairman Sergey Shvetsov has commented in the State Duma on the regulator's policies. According to him, the CBR: i) plans to introduce refinancing operations with a tenor above one month linked to the floating rate (RUONIA +); and ii) might start purchases of MBS from the market as a source of long-term funding for the banks.
We believe these measures will be actively used next year as a tool to support economic growth. Our base case scenario currently implies monetary policy easing from late 1Q13 or 2Q13. Providing medium-term refinancing linked to a floating interest rate might lead to easier monetary policy, even in a situation of stable base rates. We see MBS purchases as one of the possible sources for funding base money growth, alongside REPO (which is heavily used at the moment) and other lending operations. In our opinion, next year’s switch to an easing cycle could restart the growth of the Russian economy, which in recent months has almost stalled.
Maxim Oreshkin, Daria Isakova
VTB Capital analyst
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