Interbank Lending Rates Edge Higher Amid Tightening Monetary Policy

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RUONIA rate stands at 13.88% on Wednesday.

It is important to note that the coupon payments of most floating-rate bonds are linked to the RUONIA rate.

The average rate of ruble-denominated overnight loans (RUONIA) is the rate applied by banks when lending to each other for a period of one day ("overnight").

The rate is calculated daily by averaging the values of interbank lending operations among 35 leading Russian banks and is published on the official website of the Bank of Russia.

On Wednesday, the RUSFAR ON RUB (overnight, rubles) rate was 13.7%.

RUSFAR ON CNY (overnight, yuan) was 0.5%.

RUSFAR serves as a key benchmark:

- It reflects the level of 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 is an unsecured rate, while RUSFAR is a secured funding rate, but both are key indicators of the cost of money in the market and are used for floating rates in bonds.

RUONIA (Ruble Overnight Index Average) is the rate for unsecured overnight ruble lending, calculated by the Bank of Russia based on transactions of the top 35 banks, while RUSFAR (Russian Secured Funding Average Rate) is the secured funding rate (repo with a central counterparty), calculated by the Moscow Exchange for different terms (ON, 1M, 3M, etc.).

This overview was presented 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.