Thus, for the first time in the last seven years, deposits in the Russian national debt have become unprofitable.
The record collapse of quotations, which lasted for three days in a row, broke through the multi-month “bottom”, dropping by 0.56% on the fourth day of trading. As noted by finanz.ru, the RGBI index, which tracks OFZ prices, has set a new minimum since March 24, 2020, falling to 141.1 points. This crash is ruining the holders of securities.
“For the first time in 7 years, the fall in bond prices according to the RGBI index (by 7.9%) exceeds the income earned by interest payments on them (7.3-7.8% for classic OFZs)”, - the newspaper notes, pointing out that similar the decline was noted only during the 2008-09 and 2014-15 crises.
Realizing that under such conditions, Russian OFZs are not making money, but losing money, bondholders begin to quickly get rid of them.
Against the backdrop of progressive inflation, the Ministry of Finance raised the yield on 10-year OFZ-26235 to 7.53% per annum, while rates on the longest securities rose to almost 8%.
It is to this figure that the key rate of the Central Bank is being matched, which, as experts expect, will be raised to 7.5-7.75% in the near future, and by the beginning of the new year they predict even up to 8%.
Meanwhile, a year ago, the cost of borrowing for the Ministry of Finance was much lower: 10-year bonds were traded at 5.83%. Given current rates, the cost of borrowing for Russia has risen by a third. This will inevitably provoke a further increase in the cost of servicing the state debt, which already today costs taxpayers 1.4 trillion rubles a year.
Although Elvira Nabiullina pulled the monetary wheel as sharply as possible since 2014, the growth rate of consumer prices continues to accelerate: as of September 27, Rosstat estimated them at 7.27%. On October 6, the department will publish the final figure for the previous month.
The negative forecast for inflation in the Russian Federation has already been updated twice this year, and analysts expect the situation to worsen by the end of the year: according to the observations of the Central Bank experts, in conditions of galloping prices for goods and services, there are clearly no signs of a slowdown in current inflation in the country.