HALISTER1: Bank of Russia Bonds May be Linked to Key Rate, Polonsky Says

Bank of Russia Bonds May be Linked to Key Rate, Polonsky Says

(Bloomberg) -- Bank of Russia favors selling bonds of up to 1-yr maturity with 3-mo. coupon, Alexander Polonsky, deputy head of monetary policy department of Bank of Russia, says in St. Petersburg.
  • Bank of Russia bonds shouldn’t have same maturity as OFZs
  • No final decision on Bank of Russia bonds’ parameters has been made
  • Test bond sale may come in several months
  • Key instrument during liquidity surplus period are deposit auctions, while it’s better to use bonds during significant surplus of above 1t rubles
  • Russia may swing to liquidity surplus in end of Jan. 2017 if oil is at ~$40/bbl
  • Currently banking system still has liquidity deficit
  • During liquidity surplus Bank of Russia may hold 7-day repo auction but not at same time as deposit auction
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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