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The Bank of Russia has started to use the MICEX electronic system of trading to conclude lombard credit transactions with credit institutions. The first lombard credit transaction was concluded in the MICEX trading system? on fixed terms at 7% of yearly interest to the amount of 1 million rubles for 7 days.
The Bank of Russia’s credit operations with credit institutions, carried out with the use of the MICEX electronic system of trading, are regulated by the Rules which were put into effect in October 2006.
When the Bank of Russia grants a lombard credit to a credit institution, pledged items are securities which belong to the credit institutions and are on the Bank of Russia’s Lombard List (information on the Bank of Russia’s Lombard List can be found on the Bank of Russia’s web site: http://www.cbr.ru/hd_base/BankPapers.asp?date_req=new). A credit transaction is concluded by entering a credit institution’s order, registered in the MICEX trading system, and a reciprocal order of the Bank of Russia. Credit transactions can be concluded at auctions (American auction) and on fixed terms (at fixed interest rates).
At present, the Bank of Russia grants lombard credits on fixed terms for 7 calendar days (daily) and through auctions for 14 calendar days (on Tuesdays).
Concluding deposit and credit transactions with the Bank of Russia on the basis of the MICEX electronic system of trading gives market participants the following advantages:- high operational efficiency of concluding deposit and credit transactions with the Bank of Russia;
- use of the high-tech system of concluding transactions, based on the MICEX technologies (automated mode of concluding transactions, forming and submitting reports, electronic document interchange);
- low costs of participation combined with different options of technological access, including regional peculiarities;
- high operational efficiency of using funds kept on accounts with settlement centers of the organized securities market for operations on other markets of the MICEX (foreign exchange, government securities, stocks, corporate bonds, etc.);
- interface and technologies common with other products of the MICEX.
Interest in lombard credit transactions has grown with the increase of credit institutions’ need in liquid resources. Any credit institution can obtain the Bank of Russia’s lombard credit, including institutions which are not dealers on the government securities market and which do not have access to repos against the Bank of Russia. Find more information on concluding lombard credit transactions through the MICEX system of electronic trading at the MICEX web site: http://www.micex.ru/state/.
