**RUSSIAN ECONOMIC ANDFINANCIAL DEVELOPMENTS**

30 SEP 99

SOURCE: US EMBASSYMOSCOW

FOR WEEK ENDINGSEPTEMBER 24, 1999

 

---------------------------

FINANCIAL MARKETINDICATORS

---------------------------

 

1. FINANCIAL MARKETTRENDS

 

POLITICAL RUMORS ANDSPECULATION, MOST OF IT NEGATIVE,

AND THE PROSPECT OFRENEWED FIGHTING IN CHECHNYA,

WEIGHED HEAVILY ONFINANCIAL MARKETS EARLY IN THE WEEK.

THE RTS LOST 4.8PERCENT ON MONDAY AND ANOTHER 5.5

PERCENT ON TUESDAY,FALLING TO 76.15, THE BEST LEVEL IN

THREE MONTHS. VOLUMESWERE VERY LOW, USD 4.6 MILLION ON

MONDAY AND USD 6.4MILLION ON TUESDAY. ON WEDNESDAY AND

THURSDAY, HOWEVER,THE MARKET RALLIED, AS DOMESTIC

TRADERS CLOSED SHORTPOSITIONS AND BARGAIN HUNTERS

BOUGHT UNDERVALUEDSTOCKS. THE RTS INDEX ROSE 11.5

PERCENT IN TWO DAYS,AND FINISHED THE WEEK DOWN ONLY

O.45 PERCENT AT84.195.

 

THE RUBLEAPPRECIATED AGAIN THIS WEEK, MAINLY DUE TO

THE CBR'S DOLLARAUCTION ON THURSDAY FOR NON-RESIDENTS

WANTING TOREPATRIATE THEIR RESTRICTED S ACCOUNT

RUBLES. THE CBROFFERED USD 5O MILLION IN DOLLARS,

WHILE INVESTORSOFFERED MORE THAN USD 394 MILLION (R10

BILLION) IN RUBLESFOR CONVERSION, CREATING A RUBLE

SHORTAGE. THE RUBLEINTERBANK SHORT-TERM LOAN RATE WAS

UP BY 5O PERCENT,AND THE CENTRAL BANK HAD TO INTERVENE

TO SUPPORT THEDOLLAR ON BOTH SESSIONS. ON FRIDAY, SOME

OF THE UNUSED RUBLESFROM THE AUCTION RETURNED AND THE

RUBLE FELL SLIGHTLY,CLOSING THE WEEK AT 25.2775/USD,

UP FROM 25.41O/USDON MONDAY MORNING.

 

INTERNATIONALRESERVES WERE UNCHANGED THIS WEEK AT USD

LO.9 BILLION. THEMONETARY BASE CONTRACTED SLIGHTLY, BY

.56 PERCENT OR R1.5BILLION, TO R264.6 BILLION.

 

---------------------------------------------

2. ECONOMIC ANDFINANCIAL MARKET DEVELOPMENTS

---------------------------------------------

 

-- RUSSIA WILL FULLYMEET ITS OBLIGATIONS ON GOVERNMENT

DEBT IN OCTOBER1999, FIRST DEPUTY FINANCE MINISTER

ALEKSEY KUDRINANNOUNCED. KUDRIN SAID THE GOR WOULD

MAKE ITS PAYMENTSEVEN IF THE NEXT IMF TRANCHE WERE

DELAYED.

 

-- THE CENTRAL BANKANNOUNCED IT WILL NOT LIFT THE

REQUIREMENT OF A 10O-PERCENTRUBLE EQUIVALENT FOR

IMPORT CONTRACTS ONSEPTEMBER 30, AS ORIGINALLY

PLANNED.

 

-- ACCORDING TO THERUSSIAN STATISTICAL AGENCY, THE

AVERAGE WAGE INAUGUST TOTALED R1,586 (USD 62.44), 2

PERCENT BELOW THEJULY LEVEL. TOTAL WAGE ARREARS

DROPPED DOWN BY 5PERCENT (M-O-M) AND TOTALED R56.1

BILLION AS OFSEPTEMBER 1, 1999.

 

-- TAX ARREARS OFMOSCOW LEGAL ENTITY TAXPAYERS HAVE

INCREASED BY 6OPERCENT SINCE THE BEGINNING OF THE YEAR

AND TOTAL R25BILLION. ACCORDING TO GENNADY BYKAEV, THE

HEAD OF THE MOSCOWTAX INSPECTORATE.  TAX ARREARS TO

THE CITY BUDGETTOTAL R13 BILLION.

-- THE AVERAGEMONTHLY PENSION WILL GROW TO R545 (USD

21.46) IN THE FOURTHQUARTER OF 1999 ACCORDING THE HEAD

OF THE PENSION FUND,MIKHAIL ZURABOV.  CURRENTLY, THE

AVERAGE PENSION ISR474 (USD 18.66). THE GOR REPORTED

PLANS TO INDEXPENSIONS AT 73-74 PERCENT OF THE MINIMUM

SUBSISTENCE LEVEL.PENSION ARREARS WERE PAID OFF AS OF

SEPTEMBER 10, 1999.

 

-- GASOLINE PRICESINCREASED BY 7 PERCENT IN THE FIRST

12 DAYS OFSEPTEMBER, ACCORDING TO THE RUSSIAN

STATISTICALAGENCY.  THE AVERAGE DAILY INCREASEIN

GASOLINE PRICES WAS0.524 PERCENT, COMPARED TO 0.595

PERCENT IN AUGUST.

 

-- 3.898 MILLION TAXDECLARATIONS WERE SUBMITTED AS OF

JULY 1, 1999 ANDR2.492 BILLION IN TAXES WERE

COLLECTED, ACCORDINGTO SERGEY EMELIANOV, HEAD OF THE

TAX MINISTRY'SDEPARTMENT OF REVENUES AND PROPERTY

DECLARATIONS. 3MILLION DECLARATIONS WERE FILED BY

ENTREPRENEURS,740,000 BY PEOPLE WITH SEVERAL SOURCES

OF INCOME, 24,000 BYNON-RESIDENT INDIVIDUALS LIVING IN

RUSSIA, AND 5700 BYNOTARIES.

 

-- THE AUGUSTUNEMPLOYMENT RATE WAS UNCHANGED FROM JULY

AT 12.4 PERCENT.

 

-- THE PRODUCERPRICE INDEX INCREASED IN AUGUST TO 4.6

PERCENT COMPAREDWITH 3.1 PERCENT IN JULY.

 

--------------

3.  BANK ALERT

--------------

 

-- THE BOARD OFDIRECTORS OF ARCO ELECTED FIRST DEPUTY

PRIME MINISTERVICTOR KHRISTENKO AS CHAIRMAN OF THE

BOARD AND RE-ELECTEDALEXANDER TURBANOV AS GENERAL

DIRECTOR.

 

-- BANK MENATEP OWESR1 BILLION TO ITS PRIVATE

DEPOSITORS BUT HASONLY R200 MILLION IN OBLIGATORY

RESERVES AT THE CBR,ACCORDING TO THE BANK'S TEMPORARY

MANAGEMENT. LASTWEEK, CREDITORS VOTED TO INITIATE

BANKRUPTCYPROCEEDINGS AGAINST THE BANK. IF BANKRUPTCY

PROCEEDINGS ARESUCCESSFUL, IT MAY BE POSSIBLE TO

RECOVER R4-7 BILLIONFROM ARREARS, SECURITIES AND

INVESTMENTS IN REALESTATE.

 

-- THE CBRREGISTERED A SUBSTANTIAL INCREASE IN THE

AUTHORIZED CAPITALOF IMPEXBANK, FROM R23.7 MILLION TO

R370 MILLION.  THE CAPITAL INCREASE CAME FROM THE

RESOURCES OF THEOWNERS OF THE BANK.

 

-- AN ARBITRATION COURTDECLINED THE PETITION OF

VNESHTORGBANK TOFREEZE THE ACCOUNTS OF MEDIA-MOST AND

BONUM-M.  VNESHTORGBANK IS CLAIMING USD42.2MILLION IN

THE DISPUTE.

 

-- MOODY'S INCREASEITS CURRENCY RATING OF GAZPROMBANK

AND VNESHTORGBANKFROM CA/NP TO CAAL/NP, AND ITS

CURRENCY RATING OFALFABANK FROM CA/NP TO CAA3/NP.

 

---------

4. PRICES

---------

 

INFLATION IN THEFIRST 20 DAYS OF SEPTEMBER TOTALED 1.0

PERCENT. FOR THEPERIOD SEPT.14-SEPT.20, THE INFLATION

RATE WAS 0.4PERCENT.  AVERAGE DAILY INFLATIONIN

SEPTEMBER STANDS AT0.048 PERCENT, COMPARED TO 0.037

PERCENT IN AUGUSTWHEN MONTHLY INFLATION TOTALED 1.2

PERCENT.ROSSTATAGENSTVO FORECASTS THAT PRICES WILL

GROW BY 1.4 PERCENTPER MONTH AND THE INFLATION RATE

FOR THE FIRST NINEMONTHS OF 1999 WILL TOTAL 32

PERCENT.

 

------------------------------

5.    FINANCIAL MARKET TABLES

------------------------------

 

-----------------------------------------------------------

A. RUBLE UP AGAIN

-----------------------------------------------------------

A DEFICIT OF RUBLESCREATED DOWNWARD PRESSURE ON THE DOLLAR

THROUGHOUT THE WEEK.THE CBR INTERVENED AGAIN ON BOTH SESSIONS

PREVENT THE RUBLEFROM APPRECIATING TOO QUICKLY. PART OF THIS

DEFICIT WAS CREATEDBY THE CBR, WHICH ON THURSDAY HELD A CURRENT

AUCTION FOR NON-RESIDENTSWHO HOLD RESTRICTED RUBLE S ACCOUNTS.

SHORTAGE EXISTEDBECAUSE NON-RESIDENTS PRESENTED OVER R10 BILLION

(USD 394 MILLION) INRUBLES WHILE THE CENTRAL BANK ONLY OFFERED

USD 50 MILLION INDOLLARS. ON FRIDAY, SOME OF THE UNUSED RUBLES

FROM THE AUCTIONSTARTED TO APPEAR ON THE MARKET AND THE DOLLAR

BEGAN TO INCREASE INVALUE GRADUALLY. TRADE VOLUMES NOTCHED UP

FRIDAY ON BOTHSESSIONS.  FOR THE WEEK, THE RUBLESTRENGTHENED

0.53 PERCENT ON THEUNIFIED SESSION AND BY 1.1 PERCENT ON THE

AFTERNOON SESSION.

 

TABLE 1A:  RUBLE RATES -- MICEX SELT TRADING (NOTE1)

 ------------------------------------------------

           USD-TOD   USD-TOD   USD-TOM  USD-TOM

   DATE    AVERAGE   VOLUME  AVERAGE   VOLUME

           PRICE   (USD MN)    PRICE   (USO MN)

 ------------------------------------------------

 9/20/99   25.4024  207.83   25.4376    56.6

 9/21/99   25.3437  147.72   25.3605    38.7

 9/22/99   25.3088  159.88   25.3612    54.5

 9/23/99   25.2939    176     25.3025     57

 9/24/99   25.2775  216.59   25.3348    109.6

 

TABLE LB:  RUBLE RATES -- CASH RATES AT EXCHANGEPOINTS

(RUBLES PER USD)(NOTE 2)

-------------------------------------------------

                    PRCT CHNG           PRCTCHNG

   DATE     AVERAGE   AGAINST  AVERAGE

  AGAINST

            BUY    WEEKAGO    SELL    WEEK AGO

-------------------------------------------------

 08/20/99   25.39       -1.25   25.63       -1.39

 08/21/99   25.27       -1.13   25.51       -1.20

 08/22/99   25.27       -0.55   25.49       -0.86

 08/23/99   25.23       -0.43  25.50       -0.43

 08/24/99   25.25       -0.67   25.49       -0.89

 

TABLE IC:  RUBLE RATES-- CBR OFFICIAL EXCHANGERATE

-----------------------------------------

                    PRCT CHNG  PRCT CHNG

   DATE    OFFICIAL   AGAINST    AGAINST

            RATE     WEEKAGO   09/08/98

 -----------------------------------------

 08/20/99  25.4100       -1.13      49.56

 08/21/99  25.4000       -0.55      49.50

 08/22/99  25.3400       -0.74      49.15

 08/23/99  25.3100       -0.68      48.97

 08/24/99  25.2900       -0.43      48.85

 

---------------------

B. GKO/OFZ MARKET

---------------------

 

THE TRADE DYNAMICSON THE SECONDARY OFZ MARKET WAS

INFLUENCED BY THECBR'S CURRENCY AUCTION THIS WEEK. AT

SCRAMBLING FOR RUBLELIQUIDITY AND SELLING OFZS.

HOWEVER, LATER INTHE WEEK, DEALERS STARTED TO MAKE

REVERSE DEALS ANDBOUGHT OFZ ISSUES NUMBER 22 AND 23.

TRADE VOLUMES WEREHIGH THROUGHOUT THE WEEK.

 

-----------------------------------

TABLE 3A: OFZSECONDARY MARKET

-----------------------------------

 

         09.20.99  09.21.99  09.22.99  09.23.99 09.24.99

 TOTAL

 TRADE      N/A       N/A       N/A       N/A       N/A

 VOLUME

(MLN RUB)

 -----------------------------------------------------

C. SHORT-TERMINTERBANK RUBLE UP ALMOST TWICE

-----------------------------------------------------

 

SHORT-INTERBANKRUBLE LOAN MARKET RATES ROSE SHARPLY

THIS WEEK, DRIVEN UPBY NON-RESIDENTS STRIVING TO GET

RUBLES FOR THECURRENCY AUCTION HELD BY THE CBR. BY

THURSDAY, FEW RUBLESWERE AVAILABLE IN THE MARKET AND

THE SHORT-INTERBANKRUBLE LOAN MARKET RATE REACHED 18.4

PERCENT P.A., THEHIGH FOR THE WEEK.  ON FRIDAY,RATES

CAME DOWN SLIGHTLYAS RUBLES RE-ENTERED THE MARKET.

 

BALANCES ON BANKS'CORRESPONDENT ACCOUNTS IN THE CBR

STAYED AT LOW LEVELSOF R47-49 IN THE BEGINNING OF THE

WEEK, THEN JUMPED UPTO R53 BILLION ON FRIDAY.

 

 --------------------------

 TABLE 4: INTERBANK CREDIT

 ---------------------------

 

  DATE                     PERIOD (IN DAYS)

  -----------------------------------------------------

                    1     7     14     30     60     90

  -----------------------------------------------------

 

 SEP 20   MIBID  12.8   13.0   15.0   18.0  20.0  21.0

          MIBOR   20.4   25.0  27.0   30.0   32.0  35.0

 

 SEP 21   MIBID  16.8   13.0   15.0   18.0  20.0  21.0

          MIBOR   25.2   25.0  27.0   30.0   32.0  35.0

 

 SEP 22   MIBID  17.0   13.0   15.0   18.0  20.0  21.0

          MIBOR   25.6   25.0  27.0   30.0   32.0  35.0

 

 SEP 23   MIBID  18.4   13.0   15.0   18.0  20.0  21.0

          MIBOR   26.6   25.0  27.0   30.0   32.0  35.0

 

 SEP 24   MIBIO  17.8   22.0   24.0   27.0  28.0  30.0

          MIBOR   26.6   37.0  40.0   45.0   50.0  52.0

 

------------------------

D. STOCK MARKETRECOVERS

------------------------

 

 ON MONDAY AND TUESDAY, LAST WEEK'SDOWNWARD TREND

 CONTINUED ON THE STOCK MARKET, WITHNEGATIVE SENTIMENT

 PROVIDED BY THIS WEEK'S BATCH OFPOLITICAL RUMORS AND

 BY THE PROSPECT OF FIGHTING IN CHECHNYA.THE RTS INDEX

 LOST 4.8 PERCENT ON MONDAY AND ANOTHER5.5 PERCENT ON

 TUESDAY, FALLING TO 76.15, A LEVEL NOTREACHED IN THREE

 MONTHS. VOLUMES WERE VERY LOW, USD 4.6MILLION ON

 MONDAY AND USD 6.4 ON TUESDAY. ONWEDNESDAY AND

 THURSDAY, HOWEVER, THE RTS INDEX ROSE11.5 PERCENT AS

 DOMESTIC TRADERS CLOSED SHORT POSITIONSAND BARGAIN

 HUNTERS BOUGHT UNDERVALUE STOCKS. ONFRIDAY, THERE WAS

 A SLIGHT DOWNWARD CORRECTION. THE RTSINDEX FINISHED

 THE WEEK AT 84.195, A LOSS OF 0.45PERCENT IN REAL

 TERMS.

 

--------------------------

TABLE 5: RTS STOCKINDICES

--------------------------

 

               DOLLAR

 DATE    RTS INDEX        PERCENT CHANGE      ADJUSTED

          (R)      NOMINAL (RUB) REAL (USD)

 

 SEP 20  460.19         -4.74       -4.78      80.54

 SEP 21  434.93         -5.49       -5.45      76.15

 SEP 22  456.67          5.00       5.24     80.14

 SEP 23  483.44          5.86       5.99     84.94

 SEP 24  478.82         -0.96       -0.87      84.20

 -------------------------

 E. INTERNATIONAL RESERVES

 -------------------------

 

 INTERNATIONAL RESERVES OF THE CENTRALBANK AND THE

 FINANCE MINISTRY STAYED THE SAME THISWEEK, AT USD10.9

 BILLION. THE RESERVES WERE UNCHANGEDBECAUSE THE CBR

 INTERVENED ON THE CURRENCY SESSIONS ATMICEX TO

 PURCHASE FOREIGN CURRENCY. ALSO,ACCORDING TO CBR

 CHAIRMAN VICTOR GERASHENKO, THE CBR HASSTARTED A

PROCESS OF GRADUALLYEXCLUDING FROM ITS RESERVES MONEY

HELD IN THE ACCOUNTSOF RUSSIAN STATE BANKS OVERSEAS.

 

-----------------------------------------

TABLE 6:INTERNATIONAL RESERVES (NOTE 5)

-----------------------------------------

 

INTERNATIONAL  BLN USD  PERCENT CHG PERCENT CHG

RESERVES                 PREV WK     01.01.99

 

09.17.99        10.9      0.0        -10.7

09.10.99        10.9     -1.8        -10.7

09.03.99        11.1      0.9        -09.0

08.27.99         11.0      -4.3        -09.8

08.20.99        11.5      0.9        -05.7

 

----------------

F. MONETARY BASE

----------------

 

THE MONETARY BASEDECREASED THIS WEEK BY 0.56 PERCENT

AND TOTALED R264.6BILLION.

 

--------------------------------

TABLE 7: MONETARYBASE (NOTE 6)

--------------------------------

 

MONETARY   BLN RUBLES    PRCT CHNG FROM       PRCT CHNGFROM

BASE                       PREV. WEEK       PREV. 4 WK AVG

 

09.20.99     264.6           -0.56                -0.1

09.13.99     266.1            1.45                 0.4

09.06.99     262.3           -0.68                -0.5

08.30.99     264.1           -0.86                 1.5

08.23.99     266.4           -0.41                 1.2

 

--------------------------

G. CORRESPONDENTACCOUNTS

--------------------------

 

-------------------------------------------

TABLE 9: BALANCES ONCORRESPONDENT ACCOUNTS

-------------------------------------------

 

       DATE                BALANCE (BLN RUB)

      09.20.99                    47.556

      09.21.99                    47-982

      09.22.99                    49.824

      09.24.99                    53.781

 

-----------------------

H. RESERVEREQUIREMENTS

-----------------------

 

BANK RESERVESREQUIREMENTS REMAIN UNCHANGED SINCE JUNE 10, 1999

 

-----------------------------

TABLE 8: RESERVEREQUIREMENTS

-----------------------------

 

PERIOD       RESERVE RATE ON      RESERVE RATE ON

             ATTRACTED FUNDS OF ATTRACTED FUNDS OF

             CORPORATE CLIENTS   PRIVATE INDIVIDUALS

             IN RUBLES AND ON    IN RUBLES (PERCENT)

             ATTRACTED FUNDS OF

             CORPORATE CLIENTS

             AND PRIVATE

             INDIVIDUALS IN

             FOREIGN CURRENCY

             (PERCENT)

12.01.98-                    5

03.19.99-            7.0                  5

             (UP BY 2 PERCENT)

06.10.99-            8.5                 5.5

             (UP BY 1.5 PERCENT)  (UP BY0.5 PERCENT)

 

------------------

EXPLANATORY NOTES

------------------

 

1. EXCHANGE RATES:SELT - "SYSTEM OF ELECTRONIC LOT

(CURRENCY)TRADING" - A COMPUTER-BASED OTC-TYPE TRADING

SYSTEM ORGANIZED BYTHE MOSCOW INTERBANK CURRENCY

EXCHANGE(MICEX).  USD-TOD PRICE IS THEPRICE OF THE

DOLLAR WITH THE SAMEDAY DELIVERY.  USO-TOM PRICE IS

THE PRICE OF THEDOLLAR WITH DELIVERY ON THE NEXT DAY.

MINIMUM LOT SIZE FOREACH OF THE DOLLAR INSTRUMENTS IS

AECIAL.  AVERAGE PRICE IS QUOTED AS THE WEIGHTED

AVERAGE OF ALL THEBIDS AND OFFERS ENTERED INTO THE

SYSTEM BY VARIOUSBANKS.

 

2. AVERAGE CASHRATES ARE QUOTED AS CALCULATED BY THE

INTER-LINEINFORMATION AGENCY THAT PROCESSES DATA FROM

OVER 500 EXCHANGEPOINTS IN THE CITY OF MOSCOW.

3. INTEREST RATES:THE TABLE PROVIDES MOSCOW INTERBANK

BID (MIBID) ANDMOSCOW INTERBANK OFFERED RATE (MIBOR)

B ANNUALIZED AVERAGE BID AND OFFER RATES ONSHORT-TERM

RUBLE LOANS BETWEENCOMMERCIAL BANKS.

 

4. STOCK INDICES:THE RTS INDEX, IS THE ONLY OFFICIAL

INDICATOR OF THERUSSIAN TRADING SYSTEM.  IT IS

CALCULATED EVERY 30MINUTES OF THE RTS TRADE SESSION,

STARTING FROM 12:00.  IT COMPRISES 60 SHARES OF 35

LEADINGCOMPANIES.  THIS SHARES AREINCLUDED IN SO-

CALLED CATEGORY"A" LISTING.  THE INDEXINDICATES OVER-

THE-COUNTER STOCKPRICES.  THE INDEX REPRESENTS THE

RATIO OF THE TOTALMARKET CAPITALIZATION OF THE SHARES

OF THE COMPANIESSELECTED FOR THE INDEX TO THE TOTAL

MARKETCAPITALIZATION OF THE SAME SHARES AS OF THE

INITIAL DATEMULTIPLIED BY THE INDEX VALUE AS OF THE

INITIAL DATE (31DECEMBER, 1997) USING A BASE OF 100

BEGINNING SEPTEMBER1, 1995.  THE RUBLE-ADJUSTED INDEX

IS A DERIVATIVE OFTHE MAIN DOLLAR INDEX, USING THE

SAME BASE.

 

5. INTERNATIONALRESERVES OF THE RUSSIAN FEDERATION

REPRESENT THE AMOUNTOF RESERVE ASSETS OF THE BANK OF

RUSSIA AND FINANCEMINISTRY.  THOSE RESERVE ASSETS ARE

COMPRISED OFMONETARY GOLD, SPECIAL DRAWING RIGHTS, THE

RESERVE POSITION INTHE IMF AND OTHER LIQUID FOREIGN

CURRENCYASSETS.  THE LATTER INCLUDE SHORT-TERM

DEPOSITS INNONRESIDENT AND RESIDENT BANKS, BALANCES IN

CURRENT ACCOUNTS,FOREIGN GOVERNMENT SECURITIES, REPO

AGREEMENTS WITHTHESE SECURITIES MADE WITH

NONRESIDENTS, ANDOTHER LIQUID ASSETS (ACCRUED INTEREST

ON THESE ASSETS ISNOT INCLUDED).  MONETARY GOLD IS

EVALUATED AT USD300PER TROY OZ.  FOREIGN CURRENCY

ASSETS ARE CONCERTEDINTO US DOLLARS ON THE BASIS OF

THE CROSS RATES OFFOREIGN CURRENCIES TO THE USD,

CALCULATED USING THEOFFICIAL RATES OF THE RUBLE TO

THESE FOREIGNCURRENCIES, SET BY THE CBR.

 

6. MONETARY BASE(ML) IS COMPRISED OF CASH AND RESERVES

OF COMMERCIAL BANKSON DEPOSIT IN THE CBR.  IT IS THE

BASIC PART OF THEMONEY SUPPLY (M2).

 

7. LOMBARD CREDITS,DISTRIBUTED THROUGH AUCTIONS, ARE

AIMED TO PROVIDE THELIQUIDITY TO THE BANKING SECTOR.

THESE CREDITS AREEXTENDED TO BANKS ON THE BASIS OF

COLLATERAL (T-BILLS,OR MORE RECENTLY, SHARES).