The collapse of the RGBI index of Russian government bonds in recent weeks is explained by the changing expectations of investors regarding the Central Bank’s interest rate. The newspaper writes about this “News” Based on a survey of experts
Over the past month, the RGBI indicator has lost 3 points, falling to its lowest level since April 2022, when the OFZ market experienced a significant decline following the start of SVO. Yields on short-term and long-term bonds are increasing.
“The high rate at the Central Bank’s last meeting was supported by a review of reduction possibilities. “If earlier bearish expectations supported the market, they have now faded,” explains Digital Broker analyst Vladimir Kornev.
The RGBI index reflects bond prices and yields. The increase in the Central Bank interest rate puts pressure on demand as investors expect the issuance of new securities with higher returns and therefore the demand for existing bonds decreases. Bond yields are also affected by inflation. Yields are rising due to expectations of higher interest rates in 2024.
However, these factors have not changed much in recent times. Inflation remains high but stable, exchange rates and the budget deficit are under control.
“The bond market entered 2024 with the expectation of a rapid reversal of the Central Bank’s interest rate policy, but the regulator makes it clear that there is no point in hoping for this in the coming months,” said Alexey Kovalev, head of debt market analysis. Works at Finam Financial Group
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