Central Bank of Russia in the next two or three months will launch in test mode tool that unused past six years – its own bonds (OBR), said at a press conference on Friday, the head of the regulator, Elvira Nabiullina.
“Such a tool for a long time we have not produced, so in the next two or three months, the Central Bank may conduct a test placement of a few tens of billions of rubles, to see how the tool will be in demand, ready to understand market preferences,” – explained Nabiullina <.! - sh_cad_2 ->
In fact, by issuing bonds, the Central Bank will try to remove the financial system of excess ruble mass, explains the analyst “Uralsib” Irina Lebedeva, who predicted the start of the OBR two months ago. <-! Sh_cad_3 ->
According to the CBA, the monetary aggregate M2 in the first quarter 2016 increased by 11% on the second year of the ongoing issue of money. <-! Sh_cad_4 ->
Since the beginning of the year the Bank of Russia “published” almost a trillion rubles – of which 780 billion rubles went directly to the budget, nearly 200 billion rubles were directed to buying gold. Last year, the issue of 2.4 trillion rubles was carried out to cover the budget deficit. <-! Sh_cad_5 ->
This is the so-called spending of the Reserve Fund, which actually represents the inclusion of “printing press”. <-! Sh_cad_6 ->
“When we are financing the budget deficit through the sale of the Reserve Fund, which means emissions: the currency of the account the Ministry of Finance to the Central Bank sold to the Central Bank, which credits the Treasury bill rubles, which is already the spending in the economy, and the currency of gold reserves is not for sale”, – explains the executive director – chief analyst Sberbank Mikhail Matovnikov. <-! sh_cad_7 ->
Until recently, simultaneously with the issuance of the Central Bank withdrew the excess rubles from banks reducing lending: so, limits on the basic operations of the Central Bank – 7-day repo – c 2.5 trillion in early 2015 fell to 180 billion rubles in June 2016. At some point the debt of banks to the Central Bank is reset, and a situation arises so-called surplus liquidity, Lebedev noted. <-! Sh_cad_8 ->
According to her, another possible course for the Central Bank – deposit auctions
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In fact, the Central Bank has already almost exhausted the resources to fight inflation because of the issue, said Matovnikov of Sberbank. “The debt balance has less than 1 trillion rubles, of which about 250 billion refinancing of special tools. It turns out, left the banks to repay about 700 billion rubles. The Ministry of Finance is spending 200-300 billion a month, perhaps, the Central Bank will have to give nearly 100 billion at DIA payments to depositors, there is talk of additional credits Sanatorium some banks, such as trusts, money may be required VEB So full repayment of debts to the Central bank -. the nearest future “, – he says. <-! sh_cad_9 ->
According to him, with the release of OBR complete sterilization of liquidity will not happen: it only settles in the Central Bank, which, moreover, have yet to pay a percentage that is, continue to print additional money <- sh_cad_10 -!>
The situation with the issuance of money resembles a vicious cycle, says Matovnikov: Ministry of Finance can not give up the operations with reserve funds and replace them with loans in the domestic market because of too high interest rates and the Central Bank can not lower the rate of the fact that the Ministry of Finance continues to spend Reserve Fund, which leads to the issue of money and threatened inflation. <-! sh_cad_11 ->
“The central bank need to sit down together with the Ministry of Finance at the same table and to think of the new design of monetary policy. It is essential that both the Central Bank and the Finance Ministry has some general idea and that they were co-ordinated policy. And is not that the Ministry of Finance will continue to think only on the financing of the budget deficit, and the CBA will try to compensate for these actions “, – concludes Matovnikov
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