Shortage of Liquidity in the Banking Sector Is Growing in russia

The risk of a liquidity shortage in the banking sector is growing in russia, and by the end of 2025 it could reach USD 28.4 billion. The central bank of the rf has started holding weekly repo auctions in an attempt to prevent this.

Repo (repurchase agreement) transactions are a type of short-term lending – the sale of securities, usually federal loan bonds, to commercial banks with their subsequent repurchase on a certain date or on demand. Since the beginning of this year, the central bank of the rf has already used the repo mechanism, but auctions were held once every three weeks.

The Foreign Intelligence Service of Ukraine points out that the real reason for the shortage is the significant volumes of sales of foreign currency from the national wealth fund by the ministry of finance of the rf, as well as the increase in the cash in circulation – from USD 1.47 trillion in 2023 to USD 1.54 trillion in 2024.

Indicative for the aggressor country’s banking sector is the decline in commercial banks deposits in the central bank of the rf from USD 48.8 billion in January 2025 to USD 36.7 billion in April.

The rf central bank’s initiative to hold such auctions is related to the commercial banks’ being short of free money to cover their current expenses and the regulator’s policy of assisting the ministry of finance in selling federal loan bonds.

In fact, this is an indicator of the growing crisis in the russian banking sector – the situation with the shortage of liquidity will be long-lasting and financial institutions will need constant additional loans in the future.