For the first time, the Central Bank did not satisfy the demand of banks for "anti-crisis" liquidity

The demand of market participants at the last long REPO auction exceeded the volume of satisfied bids by 3.6 times.Banks' need for borrowing grew amid sanctions and a possible aggressive increase in the key rate

For the first time, the Central Bank did not satisfy the need of banks for liquidity under the anti-crisis mechanism of a long REPO - borrowing from the regulator secured by securities. On April 19, at an auction for a period of 28 days, the volume of demand from market participants amounted to 360.3 billion rubles, and the volume of transactions - only 100 billion rubles, follows from the information on the website of the Bank of RUSSIA. The weighted average rate was 4.6% per annum, by 0.1 p.p. above key.

Long REPO auctions were launched by the Bank of Russia in May 2020 as one of the instruments for providing additional liquidity to credit institutions. Before that, the market demand was always fully satisfied, even when banks asked for 1.2 trillion rubles at the monthly REPO auction.

Banks for the first time used one of the anti-crisis tools of the Central Bank Finance

What caused the increased demand of banks for money of the Central Bank

In April, the liquidity situation in the banking sector became more tense, says Yegor Susin, HEAD of the strategy development center at Gazprombank: “Firstly, this is due to active budget borrowing. Secondly, in the first half of April there was a noticeable outflow of funds from bank accounts into cash at the level of 250 billion rubles. Against this background, the structural liquidity surplus in the banking sector shrank significantly, falling below 1 trillion rubles.”