At a weekly deposit auction held on Tuesday, February 21, lending institutions deposited Rub 440 bln at the Bank of Russia, or in line with the set limit. What banks were ready to deposit turned out to be slightly higher (Rub 489.6 bln), and the amount declined by nearly 90% compared to what banks were ready and willing to deposit at the regulator a week ago (Rub 909.7 mln, a record high since the resumption of deposit auctions in August 2016).
As posted on the regulator's website, 166 lending institutions from 55 regions participated in the auction, offering their funds at the rates ranging from 9.75% to 10%. The cutoff rate equaled 9.98%, and the weighted average rate came in at 9.9%.
Weekly auctions are main operations designed to regulate liquidity in the banking sector, the type of an auction (repurchase or deposit) is determined by forecasting the banking sector's liquidity (deficit or surplus, respectively). The Bank of Russia previously said that in the course of a shift towards the structural liquidity surplus in 2017 there are plans to hold weekly deposit auctions as scheduled, and if it is decided to hold repurchase auctions, the regulator will inform separately.
Based on the results of 22 deposit auctions that were held in August-December 2016 (after an 18-month break the first deposit auction was held on August 9, 2016) lending institutions deposited a total of Rub 6.16 tln at the Bank of Russia.
Notably, out of eight deposit auctions held in 2017 only at two of them funds provided by banks were below the limit, while at other auctions banks' interest in short-term ruble deposits at the Bank of Russia was keener than the regulator anticipated.
