Bank of Russia: Demand for repo was 2.12 trillion rubles

Bank of Russia: Demand for repo was 2.12 trillion rubles

The Bank of Russia has reported that the demand for repo operations reached an unprecedented 2.12 trillion rubles on April 25, 2025 [1]. This figure indicates a significant increase in the need for short-term funding, highlighting the ongoing financial stress in the Russian market. The repo rate, which serves as a benchmark for short-term borrowing, was set at 20.2095% for the week ending June 10, 2025 [1].

The central bank's decision to keep its key interest rate unchanged at 21% aligns with market expectations [2]. Despite gradual easing of inflationary pressures, the Bank of Russia remains cautious, citing potential inflationary risks from a slowdown in global economic growth and a drop in oil prices [2]. The central bank expects inflation to slow to 7.0–8.0% in 2025 and return to 4.0% by 2026 [2].

The repo market's high demand reflects the current economic conditions, where businesses and financial institutions are seeking short-term funding to manage their liquidity needs. The Bank of Russia's tight monetary policy aims to combat inflation, which remains elevated at 10.3% in March [2]. The central bank's stance underscores its commitment to ensuring inflation returns to its target range.

References:
[1] https://www.cbr.ru/eng/hd_base/repo/
[2] https://tradingeconomics.com/russia/interest-rate