The regulator’s decision on the suspension of auctions annual REPO appeared on the eve of the expiration of the previous annual REPO. Wednesday, March 30, banks should return the Central Bank $2.0 bn, of which estimated Sberbank CIB, $1.5 billion is accounted for by the 12-month REPO (secured Eurobonds Russia-30) and $0.5 billion 28-day repurchase agreements (secured primarily ruble bonds Rosneft).
“Most likely, will be prolonged with the help of 28-day REPO,” — writes in his review of Sberbank CIB analysts Tom Levinson, Vladimir Pantyushin and Iskander Lutsk.
FC “Otkrytie”, which is the debtor on this REPO, is not planning to market, to buy dollars and return them to the Central Bank. Senior Vice President of Bank FK “Opening” Konstantin Tserazov reported that the Bank refinances the annual a REPO by raising funds at auction for a period of 28 days. “There are far lower rates, therefore we long been using this tool”, he said.
The Bank of Russia explains his decision by lack of demand for annual auctions REPO that prefer to attract currency for shorter periods of time. Senior strategist at Sberbank CIB Vladimir Pantyushin says the regulator’s decision was expected, since banks prefer to attract currency using the exchange tools REPO or borrow from the Central Bank for shorter periods of time.
As the analyst of Raiffeisenbank Denis Poryvai, just at the end of March – early may the banks will have to repay approximately $7.8 billion raised earlier, the Central Bank in the framework of the annual REPO. But the payments, according to estimates of Analytics, can be lower at $5-6 billion considering the fact that at the time of strengthening of the ruble banks ahead of schedule extinguished debts to the regulator.”I do not think that the abolition of the annual REPO will impact on the liquidity of banks. The last time these auctions are not so popular with banks because borrow currency from the Central Bank more profitable in the short term: the annual interest rate on REPO is more than 4%, whereas for auctions with terms of 28 days — about 2.5%,” notes Poryvai.
The annual auction REPO in the currency held by the knob with the end of 2014 to bring down the panic on the currency market. Since November 2014, when the Central Bank imposed the annual currency REPO auctions, to June, when the regulator has suspended them, the banks took from the Central Bank through this instrument $19.4 billion In mid-January the Bank of Russia resumed conducting annual auctions of foreign currency REPO 4,06% per annum, however, the banks ‘ demand at the first auction was weak: of the proposed controller $1 billion banks have chosen only $201,3 million INCISION
Poryvai does not exclude that at preservation of high level of ruble liquidity in the banking system participants will continue to reduce monetary debt to the Bank of Russia. “This can increase the demand for dollars and slow the appreciation of the ruble, which we are now seeing in the market”, — says Denis poryvay.THE END OF VALLEY
Chief expert of center for economic forecasting Gazprombank Yegor Susin believes that the abolition of REPO auctions for a term of one year will not affect the exchange rate. “This tool is no longer working, banks do not need foreign currency, because lending is reduced, and its reserves of dollars and euros in banks enough,” he says.
Today at auction Moscow exchange rate of dollar and Euro decreased against the ruble on the background of increasing oil prices. 13:43 dollar fell below 68 rubles, having decreased since the beginning of day 47 of the CPC, the Euro fell to 75.9, with the morning having lost 58 kopecks.
“The rouble has chances to continue strengthening. However, we believe that the pace of strengthening of the national currency will be modest. The dollar may fall to 67,5-68,0 rubles”, — predicts analyst PSB Alexey Egorov.