OREANDA-NEWS. December 11, 2009. Russia’s monetary base rose 3.9% to RUB5.218tr in November, according to CBR. In annual terms, the growth is slightly positive (+0.3% YoY), reported the press-centre of OTKRITIE Financial Corporation.

View: The final months of the year have seen a rise in the deficit and an increase in the number of currency interventions by CBR aimed at stifling excessive ruble appreciation. We regard the news as slightly positive because, despite the monetary squeeze and frozen credit, the banking system is improving its balance sheet by replacing expensive funds (received from the state) with cheaper resources coming from budget expenditures.

Due to frozen credit, the excess reserves of banks were the fastest growing component of the monetary base. Among other items, the increase in excess reserves was reflected in the steep growth in the number of bonds issued by CBR. On 23 November, it placed bonds at par value with a zero coupon: the volume of the issue was RUB100bn. Required reserves remained unchanged, and cash in circulation increased by 1.4%.