RUONIA Rate Hits 14.74% on Tuesday, Affecting Floating-Rate Bond Coupons

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RUONIA, the benchmark interest rate to which coupons of a significant portion of floating-rate exchange-traded bonds are linked, stood at 14.74% on Tuesday.

RUSFAR ON RUB (overnight in rubles) adjusted to 14.79% on Tuesday.

RUSFAR ON CNY (overnight in yuan) was 1.43%.

RUONIA is the unsecured overnight lending rate in rubles, calculated by the Bank of Russia based on transactions from the top 35 banks. RUSFAR (Russian Secured Funding Average Rate), on the other hand, is the secured funding rate (repo with a central counterparty) calculated by the Moscow Exchange for various terms (ON, 1M, 3M, etc.).

The main difference between the two rates is that RUONIA is an unsecured rate, while RUSFAR is a secured rate. However, both are key indicators of the cost of money in the market and are used for floating rates in bonds.

RUONIA is calculated based on the reporting data of major credit institutions in the form 0409701 "Report on operations in foreign exchange and money markets" submitted by credit institutions to the Bank of Russia in accordance with the Bank of Russia Instruction No. 6406-U dated April 10, 2023.

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