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 and clearing 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 Donetsk and Luhansk People's Republics.[7]
See also edit
References edit
- ^ a b c 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.
External links edit
- Current volume of GKO-OFZ market at the Bank of Russia website (in English)
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