MOSCOW, May 14 (Reuters) - Russia’s central bank said on Thursday it will offer roubles at one-month and one-year repo auctions in May and June, its first long-term repo auctions since 2014, to help stabilise liquidity in the banking sector.
The first one-month repo auction, with a minimum interest rate equal to the central bank’s key rate plus 0.1 percentage points, will be held on May 25, it said.
The first one-year repo auction will be held on June 22, with a floating rate equal to the key rate plus 0.25 percentage points.
The central bank is widely expected to lower its key rate from 5.5% in June as Russia faces an economic contraction due to the oil price crash and the impact of the coronavirus pandemic which has stalled economic activity across the world. Russia has recorded more than 250,000 cases of the disease.
The central bank, which usually injects liquidity into the banking sector with one-week repo auctions, said the longer-term auctions will be held on a monthly basis. Repo, or repurchase agreement, auctions, are held to increase the capacity of credit institutions to manage their liquidity.
The Bank of Russia has said the current level of liquidity in the banking sector is sufficient for it to function properly. (Reporting by Gabrielle Tétrault-Farber; Editing by Andrey Ostroukh and Catherine Evans)