Central Bank sets minimum rate on all FX repo at LIBOR+0.5 pp
MOSCOW. Dec 4 (Interfax) - The Central Bank of Russia has decided to set the minimum rate on FX repo deals for all terms (one week, 28 days and 12 months) at LIBOR plus 0.5 pp effective December 4, the Central Bank said.
FX repo operations were introduced at the end of October. The minimum rates were originally Libor + 2-2.25 pp and then lowered to Libor + 1.5 pp, however demand for this facility was not strong.
The Central Bank expects its latest decision to return the ruble to its fundamental value, from which the regulator said it had deviated, posing a risk to financial stability. Lowering rates for the allocation of FX liquidity will make those operations more effective and achieve a balance between supply and demand on the currency market amid a less volatile exchange rate, it said.