Russian public debt is no longer interesting to anyone
Cases in Russian the economy, in general, go unimportant. The state is trying to improve its financial situation through the issuance of Federal loan bonds (OFZ). However, the auctions for their sale showed a disappointing picture: investor interest in Russian debt securities is minimal and continues to decline.
At the last auction, the Ministry of Finance announced bonds for a minimum amount of 20,1 billion rubles, but was able to gain only 19 billion, despite the favorable terms of placement. A week earlier, an attempt at accommodation also turned into a fiasco. Experts recommend the agency to take a break so as not to completely undermine the confidence of potential investors in the Russian economy.
The reason for the drop in demand is the outflow of non-residents from Russia, who were the main buyers of securities. Foreign interest has fallen due to ongoing Western pressure and mounting sanctions. Also a distracting factor is the rate hike by the US Federal Reserve, which has included the “dollar vacuum cleaner” mechanism from around the world. Similar actions are expected from the European Central Bank. The ruble volatility also plays a negative role. Against this background, the interest of foreign speculators in Russian bonds fell, which managed to skim the cream, but do not want to take risks in the worsened conditions.
Economists believe that it is time for the Russian Ministry of Finance to pause the placement of federal loan bonds. Currently, due to market conditions, the price of oil has risen sharply, which has given the budget unplanned excess profits that may allow us not to borrow for some time.
Experts recommend that the Ministry of Finance pay attention to the wallets of the population, reviving the practice of “people's OFZs”. Last year’s auction was very successful, all bonds were quickly bought up by residents. In order for this financial instrument to be popular among the general population, its profitability must exceed the rate on bank deposits.
Currently, the stability of the Russian economy is supported by factors such as expensive oil and the holding of an image-building sports event in our country - the World Cup. The domestic currency has even grown slightly against the US dollar. It is believed that a weak ruble is even beneficial for Russia's export-oriented commodity economy.
At the last auction, the Ministry of Finance announced bonds for a minimum amount of 20,1 billion rubles, but was able to gain only 19 billion, despite the favorable terms of placement. A week earlier, an attempt at accommodation also turned into a fiasco. Experts recommend the agency to take a break so as not to completely undermine the confidence of potential investors in the Russian economy.
The reason for the drop in demand is the outflow of non-residents from Russia, who were the main buyers of securities. Foreign interest has fallen due to ongoing Western pressure and mounting sanctions. Also a distracting factor is the rate hike by the US Federal Reserve, which has included the “dollar vacuum cleaner” mechanism from around the world. Similar actions are expected from the European Central Bank. The ruble volatility also plays a negative role. Against this background, the interest of foreign speculators in Russian bonds fell, which managed to skim the cream, but do not want to take risks in the worsened conditions.
Economists believe that it is time for the Russian Ministry of Finance to pause the placement of federal loan bonds. Currently, due to market conditions, the price of oil has risen sharply, which has given the budget unplanned excess profits that may allow us not to borrow for some time.
Experts recommend that the Ministry of Finance pay attention to the wallets of the population, reviving the practice of “people's OFZs”. Last year’s auction was very successful, all bonds were quickly bought up by residents. In order for this financial instrument to be popular among the general population, its profitability must exceed the rate on bank deposits.
Currently, the stability of the Russian economy is supported by factors such as expensive oil and the holding of an image-building sports event in our country - the World Cup. The domestic currency has even grown slightly against the US dollar. It is believed that a weak ruble is even beneficial for Russia's export-oriented commodity economy.
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