Russia implemented an emergency loan scheme for a record trillion rubles. In both cases, success was ensured by new issues with a floating coupon (floater) with a volume of 1 trillion rubles.
The need to finance large budget expenditures forces the Ministry of Finance of the Russian Federation to take record loans. This was reported by The Moscow Times on Wednesday, December 11.
The second consecutive weekly placement of federal loan bonds exceeded one trillion rubles: this time the Russian budget attracted 953 billion rubles, and on December 4 – 957 billion rubles.
In both cases, success was ensured by new issues with a floating coupon (floater) with a volume of 1 trillion rubles. The coupon for them is calculated using a new method, which gives a higher rate than before. They were sold in full, a trillion – a record for an auction. The demand also broke the record – 1.8 trillion rubles.
It is learned that the placement was earlier stalled due to interest hike. The Ministry of Finance of the Russian Federation fulfilled the loan plan only in the first quarter, after which the deficit began. Auctions canceled due to lack of bids at acceptable prices.
Loans cannot be delayed further. At the end of 11 months, Russia’s budget deficit reached 390 billion rubles, but by the end of the year it will grow to 3.3 trillion: in December they plan to spend 6.6 trillion.
The record placements allowed the Russian Ministry of Finance to almost complete the loan program: in the last two auctions, less than 100 billion rubles had to be raised.
The success of the Ministry of Finance of the Russian Federation was helped by the Central Bank of the Russian Federation. In December, he resumed the monthly repo auction: banks could pledge purchased OFZs to him to buy new ones. On December 6, they raised 850 billion rubles in this way. The Central Bank assures that the purpose of the auctions is to avoid fluctuations in liquidity, when the Ministry of Finance will distribute money with one hand and make record loans with the other. The Central Bank will hold auctions until March. The Ministry of Finance and the Central Bank have already used such methods at the end of 2020 and 2022, when they also need to quickly raise large sums in the budget to finance expenses. At the beginning of the next year, the auctions were stopped.
We remind you that the news about the Biden administration’s consideration of tightening sanctions against the Russian Federation led to a fall in the ruble exchange rate.
Source: korrespondent
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