Data from the Bank of Russia shows that major Russian banks and foreign investors could help Moscow raise funds to finance its response to the coronavirus outbreak, the regulator has said, according to TASS.
On Wednesday, the finance ministry sold 97 billion rubles ($1.29 billion) worth of OFZ treasury bonds, with the demand of nearly 146 billion rubles.
Demand for OFZ bonds, popular among foreign investors thanks to their lucrative yields, is seen as a gauge of attitude towards Russian assets at a time when Moscow plans to step up borrowing to fight the consequences of the coronavirus outbreak.
Russia, on the brink of economic recession, reported another daily record rise in the number of cases, taking its nationwide total to 24,490 and the number of deaths to 198.
The fact that the finance ministry did not cancel auctions despite a sharp drop in the rouble, as it has done in the past, highlights Russia’s need for extra funds. On Wednesday alone, the ministry fulfilled one-sixth of its quarterly borrowing plan.
“In current conditions, the finance ministry has every chance of hitting the quarterly target but, as today’s auctions showed, it requires a premium to the secondary market,” Evgeniy Vertiporokh, an analyst at Rosbank, told Reuters.
Demand for OFZs has been supported lately by expectations that the central bank may cut its key interest rate from 6% as soon as April 24.
A rate cut would drive OFZ yields lower and push their prices higher, suggesting investors may be interested in buying the bonds before such a rate move.