Yesterday, the banking liquidity situation remained comfortable: banks continue gradually repaying 312-P, while the CBR cuts the volume of the one-week repo, but these are well covered by returning cash, the Treasury’s auctions and a fairly low budget surplus. Hence, the RUB interbank lending market remained around the key rate, but the overnight FX swap had dropped sharply to 14.75% by the end of the day. The weighted-average overnight FX swap rate for the whole session was 16.92%, so the move occurred late evening, but at some point it even touched the level of the CBR’s bid (though it is likely that the regulator was already not in the market by that time). That sharp price action could be a signal that one or a few market participants faced some issues with USD liquidity; however, this is unlikely to be a system level issue, in our view: instead, we believe that it is a separate example of liquidity position mismanagement, because demand for FX-liquidity lending facilities this week was relatively low. For front-end NDFs, the 1M rate moved up 80bp to 23.35%, as expectations for early monetary easing likely faded amid pressure on the FX spot market – especially given that there is no CBR policy meeting in February. However, the 3M and 6M NDF rates moved down 30bp and 60bp, respectively, to 21.8% and 19.8%. Therefore, the NDF curve has flattened again, with the 1m3m NDF spread down to -160bp, while it was slightly positive a few weeks ago. In addition, we noted that the spread between offshore and onshore NDF quotes increased again.