Document Type

Case Study

Case Series

Reserve Requirements

JEL Codes

G01, G28


In August 2008, Russian banks and financial markets experienced significant capital outflows after Russia invaded neighboring Georgia. The collapse of Lehman Brothers on September 15 led to further outflows and a 25% drop in Russia’s main stock index. On September 17, regulators halted stock-market trading. Later that day, the Central Bank of the Russian Federation (CBR) announced cuts to the three required reserve ratios (RRRs) it imposed on commercial banks—based on their ruble liabilities to foreign banks, ruble liabilities to individuals, and other liabilities—by 400 basis points, effective September 18, in an effort to promote banking sector liquidity. The CBR said then that it would raise RRRs back to their previous levels by March 1, 2009. However, less than one month later, the CBR implemented a second unscheduled RRR cut, this time lowering all three RRRs to a common 0.5% ratio. The CBR said that the RRR cuts released RUR 260 billion (USD 10.2 billion) into the banking system on September 18 and RUR 100 billion on October 15. In 2009, the CBR raised RRRs by a total of 200 bps in four equal increases on the first of May, June, July, and August. The new 2.5% RRR on all reservable liabilities remained in place until 2011.

Date Revised