Russian Bank Squeeze Captured by Gap in Rates: Chart of the Day
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The rate at which Russian banks borrow from each other is the highest on record relative to the central bank’s benchmark as policy makers squeeze liquidity to boost the ruble and trust between commercial lenders deteriorates.
The CHART OF THE DAY shows the interbank rate for overnight deposits surged to 6.5 percentage points more than the central bank’s main interest rate on Dec. 23, the biggest premium since Bank of Russia introduced its benchmark. One-day rates were on average 0.6 percentage points above the key rate since September 2013.