Money market: beginning of the month relief
Yesterday, USD FX swap was not available to investors, but front end rates still nudged down, as usually happens at the beginning of each month, when demand for liquidity shrinks and the consolidated budget simultaneously injects cash into the banking system. Thus, the overnight MOEX repo rate tightened 8bp to 6.03%, while the cost of EURRUB FX swap declined 42bp to 5.98%. Given the lack of market action on the global markets, it comes as no surprise that IRS and cross-currency curves ended little changed yesterday. Meanwhile, the CBR has cut the limit for overnight repo to RUB 180bn, against total demand of RUB 208.3bn, so the average rate picked up to 5.66%. Therefore, banks’ debt to the regulator under the repo window declined RUB 91.6bn. At the same time, the total volume of correspondent accounts and deposits of banks in the CBR surged to RUB 921.9bn (+RUB 53bn).
Maxim Korovin, Anton Nikitin
VTB Capital analyst
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