Russian market surges as limited trading restarts
Yields on Russia’s 10-year benchmark OFZ ruble treasury bonds surged over 20% at the opening auction on the Moscow Exchange (MOEX) on Monday. The Russian stock market has gradually resumed trading, having suspended most of its transactions three weeks ago.
Regular OFZ bond trading began at 10am GMT, after a morning auction to allow for prices to be set following the shutdown. The highest yield was 20.31% on the issue maturing on July 20, 2022. There are 55 OFZ bonds in issue.
Russia’s central bank said it would buy OFZ bonds once trading resumed, so as to prevent excessive volatility.
“These purchases will be made in the amounts needed to prevent risks to financial stability,” the bank’s governor, Elvira Nabiullina, said at a press conference on Friday, after the regulator kept the key interest rate unchanged at 20%.
Meanwhile, the ruble gained to trade 104 against the US dollar on Monday as market participants focused on the planned resumption of trading. The Russian currency weakened slightly against the euro, however, trading at 115 rubles per euro.
The MOEX nosedived a whopping 33.3% on February 24, when Russia launched a military operation in Ukraine. On February 28, trading was suspended until further notice as Western sanctions imposed in response to the offensive threw markets into turmoil.
The regulator has yet to say when trading in instruments such as stocks can restart, but a limited number of financial market operations have been permitted to resume over the next two weeks.
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