Structural surplus liquidity in the banking sector in April continued to decline

Reduction in the structural surplus in April contributed to the continued growth, albeit at a slower pace, the volume of cash in circulation and an increase in required reserves due to exchange rate revaluation of banks ‘ liabilities, it is noted in the next issue of the review “the Liquidity of the banking sector and financial markets”.

The spread of interest rates on interbank crediting (MBK) to the key Bank of Russia refinancing rate became positive on the backdrop of outflows of liquidity from the banking sector. Spread bets in the segments of “currency swap” and MBC narrowed. Despite the decline in oil prices, the situation with liquidity remains favorable in terms of currency sales by the Bank of Russia in the framework of fiscal rules.

In April, the situation on the global financial markets stabilized. A number of countries announced a gradual lifting of quarantine measures along with the measures to support the economy will help restore economic activity. Relatively favorable external background, including the rising oil prices contributed to the recovery of the Russian market.

After a review of the Bank of Russia on the possibility of easing monetary policy (DCT) and the actual reduction in the key rate, market participants began to expect a significant easing of the OST until the end of the year.

The main driver of growth of activity in the corporate loan market in March was short-term lending. The activity of members of the retail credit market also increased, which was reflected in a less significant slowing in annual terms as mortgages and consumer loans. Mortgage rate in March renewed its historical minimum.

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