Rouble climbs to near-month high after bond auctions

17 Apr, 2019

After the second auction of OFZ bonds, the rouble was 0.3 percent firmer at 63.82, its strongest level since March 22. The Russian currency traded 0.2 percent stronger against the euro at 72.19.

The Russian finance ministry, which auctions OFZ bonds weekly, said it had sold a combined 124.63 billion roubles ($1.95 billion) worth of bonds, close to the record of $2.13 billion it had sold last week.

On Wednesday, demand for OFZ bonds due in 2026 reached a record 132.1 billion roubles ($2.07 billion), the ministry said.

A third auction for inflation-linked bonds maturing in 2028 is expected to take place at around 1345 GMT.

Demand for OFZ bonds has spiked this year after months of uncertainty surrounding possible new US sanctions on Russian debt holdings.

Analysts had expected the auctions to draw high demand, including from foreign investors.

"The rouble could strengthen on the backdrop of increased investor appetite for risk and demand for OFZ bonds by non-residents," analysts from Sberbank Investment Research said in a note.

More than a quarter of OFZ bonds are currently held by foreign investors. Central Bank Governor Elvira Nabiullina said this month that non-residents were expected to increase their share of holdings in the bonds.

The rouble and Russian stocks were also buttressed by Brent oil prices climbing above $72 a barrel on steady economic growth in China and a fall in US crude stocks.

Copyright Reuters, 2019

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