Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

In 'Very Good' Sign, Banks Borrow $15Bln at Auction

Banks borrowed 388 billion rubles ($14.85 billion) of unsecured funds from the Central Bank in an auction Monday aimed at easing access to liquidity.

The lending came as the MosPrime rate, the average interest rate Russian banks charge to lend money to each other overnight, rose to a record 21 percent.

Banks borrowed 55 percent of the total funds available at an average interest rate of 9.89 percent for 35 days, the Central Bank said in a statement. The funds must be returned by Nov. 24.

"This is unbelievable, it's very good," said Yevgeny Nadorshin, chief economist at Trust Investment Bank. "Barring any catastrophic news from the U.S., the unsecured loans auctions along with the other steps already taken should be enough to normalize the situation for the financial market."

The Central Bank lowered reserve requirements from Oct. 15, the second cut since September, to 0.5 percent to "support the liquidity of the Russian banking sector." The government also pledged more than $200 billion to stem the worst financial crisis since 1998, including a banking liquidity boost worth about $86 billion, following capital outflows.

The Central Bank last week announced ratings requirements for banks that seek unsecured loans to ease access to liquidity. Banks must be rated at least B minus by Fitch Ratings and Standard & Poor's or B3 by Moody's Investors Service to apply. A total of 120 banks qualify for the auction, according to Trust Investment Bank.

Slumping commodities prices, the war with Georgia and the seizing up of global capital markets have prompted investors to pull about $63 billion from Russia since Aug. 8, UniCredit estimates.

Finance Minister Alexei Kudrin said last week that investors withdrew $33 billion from August through September.