In Russia, the risk of a liquidity deficit in the banking sector is rising, and by the end of 2025, it may reach $28.4 billion. In an attempt to prevent this, the Central Bank of Russia has started holding weekly repo auctions.
Repo operations (repurchase agreements, repo) are a type of short-term loan – the sale of securities, usually federal loan bonds, to commercial banks with the obligation to repurchase them on a specified date or upon demand. Since the beginning of this year, the Central Bank of Russia has been using the repo mechanism, but the auctions were previously held once every three weeks.
The SBER noted that the real cause of the deficit is the significant volumes of currency sold by the Ministry of Finance from the National Wealth Fund, as well as an increase in the circulation of cash – from $1.47 trillion in 2023 to $1.54 trillion in 2024, respectively.
A key indicator for the country's banking sector is also the decrease in commercial banks' deposits with the Central Bank of Russia, which fell from $48.8 billion in January 2025 to $36.7 billion in April.
The Central Bank of Russia's initiative to hold such auctions is connected with the lack of free funds in commercial banks to cover current expenses, as well as the regulator's policy of assisting the Ministry of Finance in the sale of federal loan bonds.
In fact, this is an indicator of growing crisis processes in the Russian banking sector – the liquidity deficit situation will be prolonged, and in the future, financial institutions will require constant additional loans.
