BFL: on the road the arc of frustration

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Today, after almost a month of pause, the MOF returned to the market debt: market participants were offered two issue maturing in 2021 and 2024 with a volume of RUB 10 billion But the release of 6-year OFZ -26223 managed to place only by 7.38 billion at a rate of 8.3% per annum, the demand was low. And the placement of OFZ -25083 and is considered to be cancelled with the formulation “from-for absence of demands at acceptable price levels given current market conditions”. Given the small volume of issues and taken a month’s pause, the results of the auctions failed. This suggests that increased demand from investors for Russian assets there.
After placing the index MOEX government bond RBGI dipped by 0.2% to 135,1 points, and the pair dollar/ruble rose 0.4 percent to 65.7 To the end of the day, the Russian currency can appear weak – the pair dollar/ruble may rise to 66 RUB, EUR/RUB is in a position closer to 76 RUB. In our opinion, the Finance Ministry should not rush with new releases.
If the Finance Ministry will take a break in this matter, investors may find that the Finance Ministry is willing to attract debt financing even at a weak market and waiting for negative scenarios at the end of the year. Currently, the ruble laid all the risks, the current setback for the placement of government bonds the Ministry of Finance including. From a fundamental point of view, the potential for ruble appreciation is preserved, but realize it will not be easy.
Roman Tkachuk,
Senior analyst,