RUONIA Rate Hits 15.9% on Monday, Benchmark for Floating-Rate Bonds

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RUONIA benchmark rate, which serves as a reference for floating-rate bonds, rose to 15.9% on Monday.

It is worth noting that the RUONIA rate:

- reflects the average cost of overnight ruble loans in the interbank market,

- is calculated daily by the Bank of Russia based on transactions from the top 35 banks.

On Monday, the RUSFAR ON RUB (overnight, rubles) rate stood at 15.85%.

RUSFAR ON CNY (overnight, yuan) rose by 0.53% on the first day of the week.

It is important to note that the RUSFAR rate serves as a key benchmark:

- it indicates the level of interest rates in the Russian money market,

- it is formed based on the average values of repo transactions with the central counterparty,

- it is included in the list of financial indicators approved by the Bank of Russia.

It should be noted that RUONIA (Ruble Overnight Index Average) is the unsecured overnight lending rate in rubles, calculated by the Bank of Russia based on transactions from the top 35 banks, while RUSFAR (Russian Secured Funding Average Rate) is the secured funding rate (repo with the central counterparty), calculated by the Moscow Exchange for different terms (ON, 1M, 3M, etc.). The main difference is that RUONIA is an unsecured rate, while RUSFAR is a rate for secured transactions. Both are key indicators of the cost of money in the market and are used for floating rates in bonds.

This overview was prepared by Alexey Grishchenko, Doctor of Economics, Professor at the Department of Operational and Sectoral Management of the Faculty of "Higher School of Management" at the Financial University under the Government of the Russian Federation.