CBR might shorten difference between rates for presenting and drawing liquidity - IMF
MOSCOW. Aug 3 (Interfax) - The Central Bank of Russia has an opportunity to shorten the difference between rates for presenting and drawing liquidity, the International Monetary Fund (IMF) said on Friday.
"The Bank of Russia might move to a narrower corridor for interest rates," the IMF's Senior Representative in Russia, Odd Per Brekk, told journalists in Moscow. He added that this corridor might come to 200 basis points.
Brekk also said that the CBR might reduce the number of instruments for managing liquidity.
He added that increasing flexibility in the forex rate and decreasing total forex interventions in the past year has allowed the CBR to move to a symmetrical corridor for interest rates, which ensures for more concise planning in money and credit policy.
"Future steps for developing this include formally setting the REPO rate as a key interest rate. The Bank of Russia could continue moving to a narrow interest rate corridor at maybe around 200 basis points or two percentage points. It would also be usual to limit the number of instruments and CBR interest rates in order to simplify operational mechanisms," Brekk said. He added that all these measures would allow the CBR to raise the effectiveness of its signals in regards to money-credit policy, as well as boost transparency and clearness.
The IMF also said that CBR should continue perfecting its information policy. It would be useful if the CBR publishes inflation forecasts as is done by the majority of central banks, which engage in inflation targeting, Brekk said.
The IMF also believes that it is necessary to strengthen oversight of Russia's financial sector in order to ensure stability.
"We welcome the Bank of Russia's recent accomplishments in improving analysis of financial stability and macroprudential oversight," Brekk said.
However, Brekk said that the CBR still does not possess sufficient authority for the necessary oversight of Russia's financial sector. "However, the Bank of Russia still doesn't have enough authority, which would allow it to implement effective oversight of banking groups and affiliated companies," he said.
