Russian Federation’s government bonds collapsed against the backs of rumors about increasing taxes

The RGBI Index, which reflects the cost of federal bonds, dropped from 121 points in early September to 117.

Budget problems and the announced increase of taxes have led to a collapse of prices and an increase in Russian states’ profitability. The RGBI Index, which reflects the cost of federal loan bonds (OFZ), sank from 121 points in early September to 117. The yield of long papers increased by almost 1 percent point at 14.4% per year. The Moscow Times reported this, which refers to the experts.

According to the results of eight months, his deficiency reached 4.2 trillion rubles, which is more than the annual plan.

At the beginning of next week (until October 1), the budget for the next three years should be included in Duma, as well as budget-2025 amendments. This is the main intrigue moment: what the government will offer when the possibilities for those who have no pain, as it is the last three years, is limited.

As a result of this choice, the Central Bank on September 12 unexpectedly reduced the basic rate from 18% to 17%. The market expects from the central bank to a deeper decline – up to 16%, laid out at prices – and began to re -configure at a higher rate.

Central Bank leader Elvira Nabiullina explained the Central Bank’s decision of uncertainty about what the budget policy would be.

According to him, for the central bank, the main thing is not to spend the budget, but the deficiency: the more, the higher the key rate. If the costs are covered by taxes, the rate may be lower.

OFZ profitability, like other market rates, depends on the main rate and its expected trajectory.

As you know, Russia’s ruling regime is now discussing a new increase of taxes, in particular VAT from 20% to 22%.

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