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Russian bond yields spike as trading resumes after month-long pause


After almost a month of being on the sidelines for Russian assets, some Russian assets were back in trading Monday. Bidding on OFZ bonds was open on the Moscow Exchange for a limited time.

The Central Bank of Russia announced on FridayThe federal loan bond market will resume trading on a separate auction basis on Monday at 10 AM and 11 AM Moscow time. On Tuesday, the normal format of 1 PM and 5 PM (10 am and 2 pm GMT)). The trading of such instruments has been stopped for the past three weeks.

The benchmark 10-year OFZ ruble Treasury bonds yields spiked to 19.7% early in pre-market trading, an all time high. However, they had fallen to about 13% just before official trading began.

“For all other instruments, the Moscow Exchange will trade in a manner similar to the March 18, 2022,” the central bank said.

CBR’s key interest rates were held at 20% last Wednesday, after it was more than doubled in an emergency rate rise in February. Russia’s invasion of Ukraine. In an attempt to reduce volatility in Russian assets markets, the Bank announced Friday it will begin buying OFZ bonds as soon as the Moscow Exchange resumes trading them Monday.

CBR also stated that purchases will take place during adjustment to prices for financial instruments to new conditions.

Since February 25, the Russian stock exchange has been shut down. Stocks have plummeted since then. subsequent barrage of Western economic sanctions. CBR is yet to determine when equity trading will resume. A backlog of transactions must be cleared. Over the coming two weeks, however, additional operations in financial markets will be permitted to resume.

The Russian rubleOn Monday, the euro traded at just under 100 to the dollar.