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. Last Updated: 07/27/2016

Bank to Cut Ruble Reserve Requirements

Signaling a slight softening in monetary policy, the Central Bank said Friday it would reduce commercial bank reserve requirements on ruble deposits.

Effective Nov. 1, compulsory reserves will fall to 16 percent from 18 percent for ruble deposits up to 30 days, and to 14 percent from 15 pevcent for deposits of up to 90 days.

In a statement, the Central Bank noted that inflation has stabilized at about 1 percent a month while yields on short-term treasury bills were falling.

"This allows the Bank of Russia to soften monetary policy without the risk of increasing inflation," it said, adding that the move should also "increase the attraction of the ruble currency as a savings instrument."

Interfax quoted Central Bank Chairman Sergei Dubinin as saying the lower requirements on ruble deposits should make it easier to obtain credit from commercial banks. The bank also increased the requirements for hard currency accounts to 5 percent from 2 percent.

Dubinin said the bank decided to double the foreign-currency requirement because of "fear of a decline" in its net international reserves because of high demand for hard currency in September and October.

He said the bank's long-term goal was to equalize reserve requirements on both ruble and hard-currency deposits.