OFZ (bond)
OFZ (abbreviation for Russian: Облигации федерального займа, romanized: Obligatsyi federal'novo zaima, lit. 'Federal Loan Obligations') are coupon-bearing federal loan bonds issued by the Russian government. The Ministry of Finance auctions off OFZs to finance the federal budget, or less commonly, to bail out troubled banks.[1] Given their role, they form an essential part of the Russian financial system.[1]
OFZs were introduced in June 1995 to complement the GKO market as an instrument with medium and long-term standing. Inflation-linked OFZ bonds are also issued.[2] In August 1998, the Russian government defaulted on domestically issued debt, including OFZs.[3] In 2012, OFZs were connected to the pan-Europe settlement system Euroclear.[4]
The share of foreign-held OFZs increased from nearly zero in 2006 to 25% by the end of 2013.[1] As of February 2018, 33.9% of all outstanding OFZs were held by foreigners.[5] By September 2018 the number had dropped to 27%, due to the threat of further US sanctions against the Russian economy.[6]
In February 2022, ING reported that the share of OFZs held by non-Russians has dropped to about 18%, as a result of the Russian recognition of the Donetsk and Luhansk People's Republics.[7]
On the 22nd July 2026, Russian finance ministry suspended emission of OFZs after weak demand on the last auction at the beginning of the month. This situation last happened in February 2022 when the economic consequences of the Russo-Ukrainian war forced the Central Bank of Russia to raise suddenly it's interest rate to 20% making them temporarily unaffordable.[8]
See also
[edit source]References
[edit source]- 1 2 3 Lu, Yinqiu; Yakovlev, Dmitry (2017). Exploring the Role of Foreign Investors in Russia's Local Currency Government Bond (OFZ) Market. International Monetary Fund. ISBN 9781475577587. Retrieved 27 September 2018.
- ↑ "Strong demand as Russia sells inflation-linked OFZs for second time". Reuters. 2015. Retrieved 21 December 2017.
- ↑ Zettelmeyer, Jeromin; Sturzenegger, Federico (2005). "Haircuts: Estimating Investor Losses in Sovereign Debt Restructurings, 1998-2005" (PDF). IMF Working Papers. 05 (137): 1. doi:10.5089/9781451861563.001.
- ↑ "Russia joins Euroclear". Financial Times. 4 October 2012. Retrieved 27 September 2018.
- ↑ Абрамов, Владимир (14 March 2018). "Рубль ушел в минус к доллару после выступления Терезы Мэй и аукционов ОФЗ". reuters.com. Archived from the original on 15 March 2018. Retrieved 14 March 2018.
- ↑ "Russia's finance ministry missing a third of the RUB1.5 trillion it plans to borrow next year, as foreign investors flee". BNE. Retrieved 27 September 2018.
- ↑ "Bank of England chief urges banks to show restraint on bonuses; global stocks recover – as it happened". Retrieved 8 March 2022.
- ↑ "Russia Halts Bond Auctions With More Monetary Easing in Question". Retrieved 27 July 2026.
External links
[edit source]- Current volume of GKO-OFZ market at the Bank of Russia website (in English)
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