Treasury deposits cushion Russia's banks as October liquidity gap widens

Russia's Federal Treasury added a net 672.4 billion rubles to bank funding through deposit operations in October, according to a calculation from the Bank of Russia's daily liquidity tables. The support was substantial but uneven: the banking sector's structural liquidity deficit still averaged about 3.61 trillion rubles across the month's published working-day observations.

Economist Egor Susin drew attention to the combination of Treasury deposits, cash demand and a wider liquidity shortfall in a November 3 post on his TruEcon Telegram channel. The official daily records show why a large inflow of government deposits can coexist with a growing need for central-bank financing.

Three days account for the late-month surge

The Treasury-deposit column records increases of 484 billion rubles on October 26, 952.5 billion on October 27 and 3.448 trillion on October 28. Together, those entries total 4.8845 trillion rubles.

That is a sum of positive daily changes, not the amount left in banks at month-end. Repayments on other dates offset much of the surge. Adding all 22 published October observations produces the much smaller net increase of 672.4 billion rubles. Neither figure should be described as new government expenditure.

For banks, the timing matters as well as the monthly total. Treasury deposits provide funding while they remain in place; repayment reverses that contribution. A concentrated placement can therefore ease a particular funding period without removing the sector's underlying liquidity deficit.

Cash and government flows still absorbed liquidity

The same official table shows a cumulative liquidity withdrawal of 209.4 billion rubles through the cash-circulation factor. In this series, a negative number means cash issuance takes funds out of banks' balances at the central bank. It does not measure households' cash holdings alone.

The broader government-accounts-and-other-operations column absorbed a net 203.2 billion rubles. Treasury deposits are a component of that column, so the 672.4 billion-ruble deposit inflow must not be added to it as an independent factor. The aggregate already incorporates the offsetting government operations.

This distinction also limits what can be inferred about the budget. Susin suggested that the flows might indicate better revenue performance, but identified that as an assessment pending official fiscal figures. A liquidity table is not a federal budget execution report and cannot establish the month's budget balance.

What the 3.61 trillion-ruble deficit means

The average of the 22 published working-day readings is 3.611 trillion rubles. This is Russia Economy's calculation, not a separately published official monthly average. The daily measure rose from 3.2832 trillion rubles on October 1 to 3.7766 trillion on October 30.

The Bank of Russia defines a positive liquidity deficit as the amount the banking sector needs to borrow from the central bank, after accounting for correspondent-account balances and reserve averaging. It is a funding measure, not a count of unpaid customer withdrawals or an estimate of bank losses.

The shortfall continued into November

By November 6, the official daily deficit stood at 3.8523 trillion rubles. That reading is a point-in-time observation and should not be compared directly with a monthly average as though both describe the same period.

October's records establish a narrower, useful finding: Treasury deposit operations provided net support, but that support did not eliminate the sector's need for central-bank liquidity. The distribution of future placements, repayments and cash demand will determine how that funding need evolves; the October figures alone do not establish a forecast.

Sources

• Bank of Russia: October liquidity factors
• Bank of Russia: October deficit observations
• Bank of Russia: latest daily deficit and definition
• Bank of Russia: methodology
• TruEcon: November 3 post