The Russian Ministry of Finance has announced measures to strengthen stability in the Russian government debt market.

“In order to help strengthen stability in the Russian debt market, decisions on the need to hold auctions on OFZ placement in the coming weeks will be made taking into account market conditions. At the same time, the significant size of temporarily available funds on the single treasury account (more than Rb 4.5 trillion with net borrowings planned for 2022 – Rb 2.2 trillion) allows for a flexible approach to the placement schedule,” the ministry said in a statement.

The decision was made against the backdrop of US sanctions against the country’s sovereign debt.

“The resumption of OFZ placements as the volatility of financial markets decreases may be accompanied by an increase in the share of instruments with a lower level of interest rate risk, taking into account the structure of market demand,” the ministry emphasized.

In addition, in order to reduce the risk of forced sales of government securities in circulation by certain categories of non-residents, government bonds after February 22 will be placed through the issuance of new issues of securities, additional placement of OFZs, issues of which are registered earlier than this date, will no longer be.

The United States announced sanctions against Russia because of the recognition of the independence of the self-proclaimed Luhansk and Donetsk People’s Republics (LNR and DNR) on February 22. Among other things, the U.S. authorities expanded sanctions against Russian government debt, prohibiting U.S. financial institutions from any transactions, whether primary market or secondary, with Russian ruble-denominated federal loan bonds (OFZ) or foreign currency sovereign Eurobonds issued after March 1, 2022.