Foreigners keep cutting Russian OFZ holdings

By bne IntelliNews June 29, 2023

The share of foreign investments in Russian federal ruble OFZ bonds declined further to 9% month on month as of June 1, 2023, TASS reported citing the Central Bank of Russia (CBR). The share of non-residents in outstanding OFZ volumes was 9.3% as of May 1 of this year.

The par value of OFZ bonds held by non-residents totalled RUB1.7 trillion ($20.3bn) against the total market size of RUB18.9 trillion ($222bn), according to the CBR.

Foreign investors used to be significant players in the OFZ market, holding just over a third of all the bonds at the peak in March 2020 worth RUB3.2 trillion – enough by themselves to fund a 2% of GDP deficit. (chart)

As covered by bne IntelliNews, last month Prime Minister Mikhail Mishustin said the government is developing plans to issue OFZ treasury bills in the currencies of “friendly” countries. 

The Finance Ministry intends to raise some RUB3.5 trillion ($43bn) on the OFZ market in 2023, more than official forecast for the deficit of RUB2.9 trillion is expected to be, although recent estimates by economists say that the deficit is likely to be closer to RUB4.5 trillion this year.

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