Russian Debt-Sale Success Shows Investors Bracing for Rate Cuts - Bloomberg Business:
"Russia sold all the bonds offered at a debt auction for a fourth straight week, signaling investors are seeking to lock in higher yields as they brace for further reductions in central bank borrowing costs.
The Finance Ministry received bids amounting to three times the 20 billion rubles ($389 million) of floating-coupon notes tendered on Wednesday. That’s the most Russia has raised from the sale of floaters since reintroducing the instrument in January to try to drum up demand for local debt. Government bonds gained for the first time in four days, while the ruble strengthened, extending the biggest monthly rally since 1993.
The coupon paid on Russian floaters is based on interbank market rates for the previous six months, which should amount to around 15 percent by July, according to Dmitry Dudkin, head of fixed income research at UralSib Capital. The Bank of Russia, which raised its key rate by 650 basis points in December to 17 percent, has since brought borrowing costs down to 14 percent -- with another point cut projected on Thursday."
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