The Russian Ministry of Finance told what measures it will take to strengthen stability in the public debt market in connection with the sanctions imposed by the United States. Now the department is closely monitoring the situation in the financial markets, the press service of the Ministry of Finance said in a statement.
US President Joe Biden announced new restrictive measures against Russia for recognizing the independence of the self-proclaimed Donetsk and Luhansk People’s Republics (DNR and LNR). Sanctions have been imposed, among other things, on Russian sovereign debt. “This means that we are cutting off the Russian government’s access to Western funding. It cannot receive more money from the West and trade in our and European markets,” Biden said on February 22.
From the message of the US Treasury, it follows that the United States has introduced a ban on the purchase on the secondary market of Russian government bonds issued after March 1, 2022. We are talking about the papers of the Ministry of Finance, the Central Bank and the National Welfare Fund.
The Ministry of Finance, when making decisions on holding auctions for the placement of federal loan bonds (OFZ) in the coming weeks, will take into account market conditions. This is necessary to strengthen stability in the Russian debt market, the ministry explained. The ministry noted that now a “significant amount” of temporarily free funds is placed on the single treasury account – over 4.5 trillion rubles. with the volume of net borrowing planned for this year at 2.2 trillion rubles. Thanks to this, the Ministry of Finance can flexibly approach the schedule of placements, the department explained.
“In order to reduce the risk of forced sales of tradable government securities by certain categories of foreign investors, the placement of government bonds after February 22, 2022 will be carried out by issuing new issues of securities with the termination of additional placements of OFZs, issues of which were registered earlier than the specified date,” the source said. Ministry of Finance.
At the same time, “the resumption of the placement of OFZs as the volatility of financial markets decreases may be accompanied by an increase in the share of instruments with a lower level of interest rate risk (duration), taking into account the structure of market demand,” the ministry added. The relevant organizations on the securities market will notify about the changes.
Yesterday, the Central Bank announced that in order to help the financial market adapt to increased volatility, it allows organizations to indicate in their reports the market value of shares and bonds as of February 18, 2022 until October 1 this year. For banks, the same measures apply to foreign exchange rates.
The Ministry of Finance noted that if necessary, it will take additional measures. Together with the Central Bank, the department will continue to monitor the situation.