CBR blamed the collapse of the ruble greed of large corporations
12/11/2014 00:53
Central Bank of Russia and the bankers explained who engage in speculation on the currency market: large corporate clients concluded with banks OTC derivatives (forward contracts), triggering margin calls which led to the collapse of the ruble autumn when oil went down.
"The Central Bank has repeatedly publicly notified plans to move to a floating exchange rate of the ruble, and it was quite obvious that this voyage will be accompanied by greater volatility ... however, many banks have managed to sell significant amounts of OTC derivatives to its clients, large corporate," - said Director of Financial stability Bank Sergei Moiseyev.
"Large corporate managed to conclude these derivatives, despite some prerequisites that spoke against such transactions. As a consequence, when the oil price came down, most of these derivatives had to perform, and therefore we are the last few months, when the movement of the ruble after oil prices, we have witnessed how large Russian corporations losses on OTC derivatives with foreign currency component began to reach the sum of the tens of billions of rubles. This is a fact of life, "- said to Moses Repo forum.
Speculate exporters?
Head of Treasury VTB Oleg Gorlinsky said that the Central Bank periodically examines the current foreign exchange position of the bank, waiting for him unidirectional action, but in practice is that "the bank gets to the other side, which is usually due to the fact that you kroesh client's position" .
"Look, for example, through you, the customer to hedge your position. We take a contract in which he used to sell a product, and this product should be once the delivery dollars. Then he came to you at the time of shipment, and bought ... contract to close itself currency risks at the time when it will pay off with customers, "- said the treasurer of VTB.
"We, of course, in this contract sew some kind of conditions that trigger as margin call when the rate of the ruble-dollar certain value. At this point he comes to us, or to renew a contract, or by calling disburse it, he is under the for example, there is no currency, and at this point it is necessary to take and sell rubles. He does it through us, we close the deal on the market, at this point we need to take and sell rubles. "
"Outwardly, it looks as though we went out to buy the currency, but we do not buy, because we need it, and to transmit it to the client, under his deal with us."
Back in late November, the bankers said that a conservative approach to the provision of the Central Bank of the Russian Federation ruble liquidity will result in short-term problems in the money market and will be painless for currency speculators themselves as guilty in the fall of the ruble collapse of their corporate clients.
Treasurer of a large bank told reporters on Wednesday that the authorities need to do large corporations directly:
"I do not understand how they (CB) define the concept of a speculator and nobody understands us ... there is a stream of client operations - we sell to the customer and the same buy in the market - we have a zero position. There is only a re-evaluation of client operations. I know that other large banks also closed position. Then let go and check out the company, maybe this is not the banking sector is speculating. "
Treasurers say that the CBR at certain days exchange requests data on the foreign exchange position of banks.
"They have to go check the final destination currencies, and they are not banks."
VTB also said that the Central Bank does not request information about the final buyer of currency, they had no control over.
"The Central Bank conducts periodic talks with banks on the basis of trading days, like, what was related this or that operation," - said Gorlinsky.
Managing Director at Alfa Bank, Alexey Marey said that the Central Bank of Russia has threatened to limit the financial support of banks, which will suffer losses from speculation in the foreign exchange market.
"We have not been told," - said the treasurer of VTB.
In early December, the Russian authorities have moved to direct threats against speculators, trying to stop the fall of the ruble, promising through the boards of directors of state companies to influence the exporters, whose influence on the market has increased under compression currency liquidity.
what next
Corporations and banks Treasury should have learned a lesson from what happened the collapse of the shadow market of derivatives, the central bank said.
Not only exporters entered into forward foreign exchange contracts:
"If you do not have foreign currency earnings and assets, why are you doing currency derivatives? It is not clear," - said Moses.
"Oddly enough, most of the derivatives in consultation with the dealers and corporations, do not for hedging purposes, the nature of what they are. And for reasons of lower interest expenses on loans or obtain additional income for speculative foreign exchange movements."
Thus Moses believes that the situation got out of control:
"Now most of the transactions or prematurely terminated with compensation, or structured, ie the beginning of a process in which Lehman Brothers took several years, we thank God, the position of trillions of dollars, and smaller, so they can be more or less rapidly resolve . But it does mean that you need to choose counterparties with an acceptable, minimal credit risk and try to manage it. "
The central bank in this situation should make the market more transparent futures contracts, he says:
"For our part, as a regulator, it is necessary to undertake prudential efforts to discourage OTC opaque shadow strange instruments and, on the contrary, encourage centralized clearing."
"We need to make sure that corporate in which the volume of the positions are unknown, we see only the negative financial result in their statements that their transactions are transparent for us."
CBR wants to accelerate in this regard the adoption of the law on the repository to corporations along with professional market has a duty to report their derivatives.
"Because we see the effects of what - what then have to turn to the government for support," - said Moses.
Oksana Kobzev Elena FACTORY
Source: Reuters
400 billion. Rubles for the collapse of the ruble
12/11/2014
Central Bank will offer banks 700 billion rubles for 3 years
The Bank of Russia on December 15 will hold the Lombard credit auction, which will offer banks 700 billion rubles for 36 months, said the regulator.
Funds will be provided at a floating interest rate tied to the key rate of the Central Bank. Its minimum amount of 10.75% per annum, which corresponds to the base rate increased by 0.25 percentage points.
"Implementation of this auction will help reduce the adverse impact of the growth of banks' debt refinancing operations of the Bank of Russia in the structure of their liabilities by maturity. The Bank of Russia does not involve regularly Lombard credit auctions for a period of 36 months," - says the Bank of Russia.
Earlier this week, the Central Bank unexpectedly pumped into the financial system of about 400 billion rubles short of money - this amount was increased weekly limit repo loans. As a result, the total amount of funds provided by the Bank of Russia within the framework of this instrument, rose to absolute record 3.21 trillion rubles.
Analyst "Uralsib Capital" Irina Lebedeva said Central Bank's actions "inconsistent": the week before the regulator and Russian President Vladimir Putin talked about the possible limitation of banks in ruble financing in order to create demand for the ruble and maintain its course.
"By the end of the week (after operations Ministry of Finance and the Pension Fund - Ed.) On the market can be created excess liquidity in the amount of 400 billion rubles. This may create additional pressure on the ruble," - said Lebedev.
According to her, "restrict access to ruble liquidity could become a more effective measure to curb the weakening of the ruble than the mechanism of interest rates."
Earlier Thursday, the Bank of Russia raised the rate to 10.5%, after which the ruble has fallen to new lows against the dollar (55.8 rubles) and the euro (69.3 rubles).
Image: Fotolia / PhotoXPress
12/11/2014 00:53
Central Bank of Russia and the bankers explained who engage in speculation on the currency market: large corporate clients concluded with banks OTC derivatives (forward contracts), triggering margin calls which led to the collapse of the ruble autumn when oil went down.
"The Central Bank has repeatedly publicly notified plans to move to a floating exchange rate of the ruble, and it was quite obvious that this voyage will be accompanied by greater volatility ... however, many banks have managed to sell significant amounts of OTC derivatives to its clients, large corporate," - said Director of Financial stability Bank Sergei Moiseyev.
"Large corporate managed to conclude these derivatives, despite some prerequisites that spoke against such transactions. As a consequence, when the oil price came down, most of these derivatives had to perform, and therefore we are the last few months, when the movement of the ruble after oil prices, we have witnessed how large Russian corporations losses on OTC derivatives with foreign currency component began to reach the sum of the tens of billions of rubles. This is a fact of life, "- said to Moses Repo forum.
Speculate exporters?
Head of Treasury VTB Oleg Gorlinsky said that the Central Bank periodically examines the current foreign exchange position of the bank, waiting for him unidirectional action, but in practice is that "the bank gets to the other side, which is usually due to the fact that you kroesh client's position" .
"Look, for example, through you, the customer to hedge your position. We take a contract in which he used to sell a product, and this product should be once the delivery dollars. Then he came to you at the time of shipment, and bought ... contract to close itself currency risks at the time when it will pay off with customers, "- said the treasurer of VTB.
"We, of course, in this contract sew some kind of conditions that trigger as margin call when the rate of the ruble-dollar certain value. At this point he comes to us, or to renew a contract, or by calling disburse it, he is under the for example, there is no currency, and at this point it is necessary to take and sell rubles. He does it through us, we close the deal on the market, at this point we need to take and sell rubles. "
"Outwardly, it looks as though we went out to buy the currency, but we do not buy, because we need it, and to transmit it to the client, under his deal with us."
Back in late November, the bankers said that a conservative approach to the provision of the Central Bank of the Russian Federation ruble liquidity will result in short-term problems in the money market and will be painless for currency speculators themselves as guilty in the fall of the ruble collapse of their corporate clients.
Treasurer of a large bank told reporters on Wednesday that the authorities need to do large corporations directly:
"I do not understand how they (CB) define the concept of a speculator and nobody understands us ... there is a stream of client operations - we sell to the customer and the same buy in the market - we have a zero position. There is only a re-evaluation of client operations. I know that other large banks also closed position. Then let go and check out the company, maybe this is not the banking sector is speculating. "
Treasurers say that the CBR at certain days exchange requests data on the foreign exchange position of banks.
"They have to go check the final destination currencies, and they are not banks."
VTB also said that the Central Bank does not request information about the final buyer of currency, they had no control over.
"The Central Bank conducts periodic talks with banks on the basis of trading days, like, what was related this or that operation," - said Gorlinsky.
Managing Director at Alfa Bank, Alexey Marey said that the Central Bank of Russia has threatened to limit the financial support of banks, which will suffer losses from speculation in the foreign exchange market.
"We have not been told," - said the treasurer of VTB.
In early December, the Russian authorities have moved to direct threats against speculators, trying to stop the fall of the ruble, promising through the boards of directors of state companies to influence the exporters, whose influence on the market has increased under compression currency liquidity.
what next
Corporations and banks Treasury should have learned a lesson from what happened the collapse of the shadow market of derivatives, the central bank said.
Not only exporters entered into forward foreign exchange contracts:
"If you do not have foreign currency earnings and assets, why are you doing currency derivatives? It is not clear," - said Moses.
"Oddly enough, most of the derivatives in consultation with the dealers and corporations, do not for hedging purposes, the nature of what they are. And for reasons of lower interest expenses on loans or obtain additional income for speculative foreign exchange movements."
Thus Moses believes that the situation got out of control:
"Now most of the transactions or prematurely terminated with compensation, or structured, ie the beginning of a process in which Lehman Brothers took several years, we thank God, the position of trillions of dollars, and smaller, so they can be more or less rapidly resolve . But it does mean that you need to choose counterparties with an acceptable, minimal credit risk and try to manage it. "
The central bank in this situation should make the market more transparent futures contracts, he says:
"For our part, as a regulator, it is necessary to undertake prudential efforts to discourage OTC opaque shadow strange instruments and, on the contrary, encourage centralized clearing."
"We need to make sure that corporate in which the volume of the positions are unknown, we see only the negative financial result in their statements that their transactions are transparent for us."
CBR wants to accelerate in this regard the adoption of the law on the repository to corporations along with professional market has a duty to report their derivatives.
"Because we see the effects of what - what then have to turn to the government for support," - said Moses.
Oksana Kobzev Elena FACTORY
Source: Reuters
400 billion. Rubles for the collapse of the ruble
12/11/2014
Central Bank will offer banks 700 billion rubles for 3 years
The Bank of Russia on December 15 will hold the Lombard credit auction, which will offer banks 700 billion rubles for 36 months, said the regulator.
Funds will be provided at a floating interest rate tied to the key rate of the Central Bank. Its minimum amount of 10.75% per annum, which corresponds to the base rate increased by 0.25 percentage points.
"Implementation of this auction will help reduce the adverse impact of the growth of banks' debt refinancing operations of the Bank of Russia in the structure of their liabilities by maturity. The Bank of Russia does not involve regularly Lombard credit auctions for a period of 36 months," - says the Bank of Russia.
Earlier this week, the Central Bank unexpectedly pumped into the financial system of about 400 billion rubles short of money - this amount was increased weekly limit repo loans. As a result, the total amount of funds provided by the Bank of Russia within the framework of this instrument, rose to absolute record 3.21 trillion rubles.
Analyst "Uralsib Capital" Irina Lebedeva said Central Bank's actions "inconsistent": the week before the regulator and Russian President Vladimir Putin talked about the possible limitation of banks in ruble financing in order to create demand for the ruble and maintain its course.
"By the end of the week (after operations Ministry of Finance and the Pension Fund - Ed.) On the market can be created excess liquidity in the amount of 400 billion rubles. This may create additional pressure on the ruble," - said Lebedev.
According to her, "restrict access to ruble liquidity could become a more effective measure to curb the weakening of the ruble than the mechanism of interest rates."
Earlier Thursday, the Bank of Russia raised the rate to 10.5%, after which the ruble has fallen to new lows against the dollar (55.8 rubles) and the euro (69.3 rubles).
Image: Fotolia / PhotoXPress
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