Russian Treasury bonds fall by up to 32% on return to the stock exchange

Moscow, 21 Mar The obligations of the Russian Treasury (OFZ) were traded again today on the Moscow Stock Exchange with falls of up to 32% in prices, the economic daily Kommersant said today. On the twenty-sixth day of the Russian military offensive in Ukraine, the federal loan bond trading segment reopened and opened with drops of between 1% and 32%, according to the source. The reopening occurred first for one hour in “discreet auction” mode and then in a “normal” way. The Central Bank of Russia announced last Friday this resumption of bond negotiation and stated that it will intervene in the market to stabilize it. “To ensure a balanced liquidity position in the stock market and avoid excessive volatility, the Bank of Russia will purchase federal government bonds in the amounts necessary to limit financial stability risks,” he said. The monetary entity will make these purchases “until the prices of financial instruments are fully adjusted to the new conditions,” he said. To neutralize the impact of these purchases on monetary policy, the Bank of Russia plans to subsequently sell the entire portfolio of these bonds, he added. He also noted that information on the resumption of trading of other instruments on the Moscow Stock Exchange will be communicated at a later date. The Russian parquet has been closed since February 28, four days after Russian President Vladimir Putin launched what he calls a “special military operation” in Ukraine. On the 28th, Russia dawned with the knowledge that the European Union, the US, Canada and other partners would exclude some Russian banks from the international interbank communication system SWIFT, an unprecedented blow to isolate the country from the global financial system. Since then, it has only been traded in the Moscow Moex under exceptions imposed by the Central Bank, such as direct orders with settlements in rubles, derivatives (except in the currency pairs section), precious metals and some contracts for futures on closing positions, among others. Before the closing of the parquet, the stock market plummeted by 45% and the main values were left over 58%. The ruble also plummeted almost 30 per cent against the dollar and the euro, a fall not seen since at least 1993 and 1994, respectively.