Page 92 - RusRPTOct23

The overall amount of ruble Liquid Assets (LA) now stands at approximately 16.9 trillion rubles. This represents a sufficient level, covering 21% of client funds in rubles or 47% of individual client funds. Additionally, banks have the potential to obtain another 9.5 trillion rubles (equivalent to 12% of client funds) from the Bank of Russia by pledging non-market assets as collateral. Consequently, available sources of ruble liquidity account for roughly 33% of client funds in rubles.
Furthermore, the reserve of foreign currency liquidity, which amounts to 53 billion US dollars, remains at a satisfactory level. It covers approximately 55% of client funds and 29% of foreign currency obligations. In July, these figures were at 50% and 27%, respectively.
DEBT: In August, the portfolio of debt securities experienced a slight decrease (-0.3% or 70 billion rubles), primarily due to the negative revaluation of bonds amid rising interest rates.
Throughout August, a portion of Federal Loan Bonds (OFZ) was either redeemed (~90 billion rubles) or sold in the secondary market (~90 billion rubles), mostly with fixed coupon income. This volume was replaced by new issuances of OFZ (~180 billion rubles), with approximately 80% having floating coupons.
Overall, the issuance activity by the Russian Ministry of Finance decreased slightly compared to July, with the total placement of OFZ reaching around 230 billion rubles (compared to 340 billion rubles in July). In addition to banks, demand for OFZ was also demonstrated by Non-State Pension Funds (NPFs), which acquired approximately 16% of the total issuance volume for their clients within trust management frameworks.
8.1.7 Banks specific issues
The Bank of Russia sees signs of excesses on the market of mortgage, which is growing with high rates, the regulator’s Governor Elvira Nabiullina told a forum, adding that the quality of loans is also concerning. "We see signs of excesses on the mortgage [market], which grew with rates totaling 30% in the past 12 months. Those are high rates. And here we are, of course, concerned about the quality of loans and their influence on the residential property market," she said. The Central Bank will monitor the quality of mortgage loans to prevent emergence of systemic risks and assume tight measures if necessary, Nabiullina added.
The Russian authorities are planning a substantial increase in spending on preferential and family mortgages for next year, allocating nearly 454bn rubles, a fourfold increase from previous plans and three times more than this year. This surge is attributed to an elevated key interest rate and increased mortgage issuances. The Central Bank, which advocated reducing preferential mortgage programs, has observed a rapid deterioration in loan
92 RUSSIA Country Report October 2023 www.intellinews.com