Rates: budget continues absorbing
The consolidated budget has absorbed some RUB 70bn month-to-date due to the repayment of Federal Treasury deposits by local banks (compared with net liquidity injections over the same period in the month before). Thus, the money market is not getting better as liquidity injections by the budget approach. Overnight FX swap is traded at the CBR offer around 6.65%. Commercial banks’ auction repo indebtedness hit RUB 3.04tn, i.e. an historical high, and the overnight FX swap facility is at RUB 255bn. The situation is unlikely to improve before the beginning of 2014, as budget liquidity injections come out in the last few days of the year. The XCCY and IRS curves look inactive: 2-year XCCY closed at 6.28% and 2-year IRS at 7.0%. 3-month MosPrime remains close to 7.15%.
Maxim Korovin, Anton Nikitin
VTB Capital analyst
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