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Rouble steadies as Russia returns to domestic debt market

Rouble steadies as Russia returns to domestic debt market

Reuters · 09/14/2022 03:29
Rouble steadies as Russia returns to domestic debt market

- The rouble stabilised 60 against the dollar and euro on Wednesday, with the focus on the Russian finance ministry's return to the debt market for the first time since February.

At 0714 GMT, the rouble was 0.1% weaker against the dollar RUBUTSTN=MCX and euro EURRUBTN=MCX, at 59.94 to both.

"The focus is on the first OFZ placement in half a year," said Georgy Vashchenko, deputy director of Freedom Finance Global's research department, expecting borrowing to be used to refinance domestic debt, among other things.

Russia in February suspended weekly auctions of the OFZ treasury bonds it uses to plug budget holes. On Wednesday it will offer a 10-year bond RU26239=MM and a volume of 10 billion roubles.

"Demand is likely to be high at the first auction, since investors expect a key rate cut on Friday," said Vashchenko.

The majority of analysts polled by Reuters expect the Bank of Russia to cut its benchmark interest rate by 50 basis points to 7.5% on Friday, to encourage lending as inflation continues to slow.

Russian stock indexes were lower, with the dollar-denominated RTS index .IRTS down 0.6% to 1,276.3 points, edging away from a more than 2-month high hit in the previous session. The rouble-based MOEX Russian index .IMOEX was 0.7% lower at 2,428.8 points.

"In the term, the MOEX index may consolidate around 2,400-2,450 points, but in the medium term we expect growth to continue – support may come from dividend payments by Russian companies, which this year have shifted slightly from the middle to the end of the year," said BCS Global Markets in a .

For Russian equities guide see RU/EQUITY

For Russian treasury bonds see 0#RUTSY=MM

(Reporting by Alexander Marrow; Editing by Alexander Smith)