The banking liquidity situation remained comfortable yesterday, as illustrated by the low overnight rates: the weighted-average overnight FX swap was 14.105%, while overnight repo rates stayed at 15.00%. Additionally, MinFin received only RUB 6.6bn demand at its 35-day deposit auction for RUB 20bn; all bids were covered at a 16.11% average rate, just 11bp above the minimum threshold. Meanwhile, debt from the 312-P window also continued its gradual decline. Budget outlays are providing liquidity, while lower repo volumes release collateral, which gives banks some confidence that in a worst-case scenario they would be able to raise any required funds from the regulator. On the other hand, demand for new loans is probably subdued, given relatively high borrowing rates, which in turn give banks less incentive to bid for term funding. Front-end NDF rates bounced up, with the 1M NDF closing up 60bp at 16.24%; the 6M ended up 20bp at 15.02%. Longer-dated XCCY swap rates tightened somewhat. 3M MosPrime declined 27bp to 17.8%, which pushed the IRS curve 75-85bp lower. Hence, the basis visibly narrowed.