Russian financial markets were on a much surer footing in January. Investor sentiment gained a boost from softening U.S. Federal Reserve rhetoric over forthcoming monetary tightening, the advances in U.S.-China trade talks, and oil prices, with Brent upwards of USD60 a barrel, according to the 35th issue of the commentary “Banking Sector Liquidity and Financial Markets.”

The structural liquidity surplus dropped in January to 2.7 trillion rubles, as budget-channel funds saw a seasonal outflow. Short-term interbank rates were close to the Bank of Russia’s key rate, with the spread between them slightly negative. The forex liquidity position remained strong. The resumed fiscal rule-based purchases of foreign currency had no major implications for either forex liquidity or ruble exchange rate movements.

Household deposits continued to grow in December through January, as the rise in deposit rates persisted. Banks’ lending to the economy continued expanding, led by the retail market segment.