73.6% decrease in the average repo acceptance / the gap between banks' order and accepted credit increased + table

The average accepted repo has increased from 264.8 hemats in April to 70 hemats in September; At the same time, the average order of banks increased and the gap between demand and acceptance in open market auctions increased. The post 73.6% decrease in average repo acceptance / bank order gap and accepted credit widened + table appeared first on Safir Arjan.

According to the report of Ambassador Arjan, the average credit accepted in open market auctions decreased from around 265 hemats in April 1405 to 70 hemats in September; Meanwhile, the average orders sent by banks increased from 331 to 401 units. This change increased the accepted repo share of total orders from around 80% in April to 17.5% in September and widened the gap between the two sides of the auction.

Reviewing the data of Central Bank's monetary policy executive operations shows that the average volume of repurchase agreement accepted in each auction has decreased by 73.6% during this period, but the average registered demand has increased by 21.1%. The average admission rate was 165 in May and 130 in June. Then it reached 56 hemats in July and 62.5 and 70 hemats were recorded in August and September respectively.

In the last auction under review, on Mehr 20, banks sent nearly 293 orders, of which 70 orders were accepted; equivalent to 23.9 percent of orders. However, the repo acceptance figure does not represent all resourcing operations. In the last two auctions of Shahrivar, the definitive purchase of bonds was also recorded.

How did the average repo acceptance rate go from 265 to 70?

In April 1405, three open market auctions have been recorded in the analyzed data. The amount of repo accepted in these auctions was 359.2, 225.11, and 210 hemts, respectively, and the average acceptance in each auction reached 264.77 hemts. On the other hand, the average orders sent by banks were recorded at 331.02 hemats. Based on this, the ratio of total acceptance to total orders of the month was about 80%.

In May, the average demand decreased to 297.13 hemts, but the average acceptance also reached 165 hemts. In June, the direction of demand changed and the average order went up to 365.09 hem; While the acceptance of all four auctions this month was on 130 lots.

The average admission rate continued to decrease in Tir and this number reached 56. The volume of accepted contracts in the five auctions of July changed from 70 at the beginning of the month to 40 at the end of the month. Then the average acceptance in August increased to 62.5 hemts and in September, all five auctions were conducted with acceptance of 70 hemts. Therefore, the admission path in the first half of the year included a decrease until July and a limited increase in the following two months. Despite this increase, the average of Shahrivar was still about 194.8 hems lower than Farvardin.

The average order of banks reached 401 hemats in Shahrivar

The average orders sent by banks in April was 331.02 hems and reached 297.13 hems in May. After this reduction, the average demand increased in Khordad and reached 365.09 tons. In July and August, this figure was recorded as 386.30 and 386.63 hemt, respectively, and it increased to 401.02 hemt in September.

The comparison between the beginning and the end of this period shows that the average order has increased by 70%. At the same time, the gap between average demand and average acceptance reached from 66.3 hemts in Farvardin to 331 hemts in September. This distance shows the volume of unaccepted orders in the auction.

Among the auctions of the first half of the year, the highest order registered belonged to June 25; When banks sent 534.13 orders and 130 orders were accepted. On August 26, the demand reached 483.12 hemts, while the acceptance was 60 hemts.

In the auction of 20 Mehr, the volume of orders was lower than these two stages and was equal to 292.99 tons. With the acceptance of 70 hemats, the distance between two digits reached 222.99 hemats. The acceptance share in this auction was 23.9%; However, unfilled orders alone do not indicate the extent of banks' unmet needs from all sources of access.

What changes will the definitive purchase and the maturity of the contracts create in the image of the operation?

In the last two auctions of Shahrivar, in addition to the repurchase agreement, the definitive purchase of bonds is also recorded in the data. On 23 Shahrivar, the central bank made 19.52 outright purchases and accepted 70 repos. The total amount of these two operations reached 89.52 hemats. On September 31, 2.06 purchase orders were recorded along with 70 repo orders. A total of 72.06 hemats.

This combination shows that the same amount of repo in two auctions does not necessarily mean that the total amount of the operation is the same. Also, outright purchase and repurchase agreement are different in terms of maturity. A repurchase agreement is associated with an obligation to reverse the transaction at the maturity of the contract, but an outright purchase does not have such a deadline for the return of the same transaction.

The data of 1403 also shows the change in the composition of maturities. In the June 27 auction, 8-day and 85-day contracts were registered side by side, and in the following weeks, there were shorter and longer contracts at the same time. In such a situation, part of the resources of the previous contracts will still remain at the disposal of the banks.