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The U.S. Senate has fallen off the ruble and Russian government bonds — the dollar waiting for 90

If it works a new draft of U.S. sanctions against Russia, analysts expect the dollar rate in Russia for 90. This is confirmed by the Russian analyst Stepan Demura. The market of the Russian debt, since April, has already survived two major sales, is a relapse.The prices of debt obligations of the government of the Russian Federation once again fall on the Moscow stock exchange for the second consecutive day on news that the U.S. Senate received a bill that radically expands sanctions against Russia. The document proposed by the bipartisan group, including Republican John McCain and Democrat Bob Menendez, requires to tighten restrictions for the oil and gas sector of the Russian Federation for sponsorship of international terrorism, and to deny foreign investors any operations with Russian debt.

Existing sanctions “was not able to force the Kremlin to change its behavior,” and the necessary “crushing sanctions against Putin’s Russia, yet he did not cease to interfere in the electoral process of the United States,” said the Republican from South Carolina Lindsey Graham.

“Again sounds the sanctions rhetoric has exacerbated the situation of Russian securities,” notes the analyst of FC “URALSIB” Olga Sterol.

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On Friday, the most liquid OFZ fell to the lowest since June marks: paper 26207 — “favorite” issue non — residents- fell by 0.18% after declining by 0.54% yesterday, to mark 102,57% of par.

 

26217 OFZ maturing in 2021 and almost set a new low since November last year (for 103.36% of the nominal value).

The price index of Federal bonds RGBI declined by 0.9 points over the two days and stopped a step away from the record for 10 months, which he lost by only 0.16 points.

 

Foreign investors owning bonds of Federal loan of 1.9 trillion rubles, and controlling almost 29% of the market, they can consider the scenario of sanctions against the national debt as the base, says the analyst of Raiffeisenbank Denis Poryvai: this is evidenced by an abrupt release of securities after making the “black list” of “RUSAL”.

According to the Bank, during April-June, non-residents sold government bonds at 6.7 billion dollars, or 370 billion rubles.

To redeem the failure of the market accounted for Russian investors at the expense of pension savings of the population and, possibly, the money the Bank received in the rehabilitated banks, says Poryvai.

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If the bill still be adopted, followed by a new sale, senior analyst at “Alpari” the novel Tkachuk.

Although, according to available information, currently, we are talking about the ban on the operation, only with a new OFZ issues, the outcome of non-residents can be total. “Compliance may not allow them to keep even the old editions,” says Poryvai.

In this case, the market debt of the Russian Federation threatens the collapse, predicts Citigroup: the yield on 10-year securities from 7.8% will jump to 11.6% by the end of 2019.

This will increase the cost of borrowing for the Treasury, will hit the budget, and the sale will trigger capital flight, which ultimately weaken the ruble.

“The dollar may rise to 70-75 rubles, and in time the panic can rise up to 80-90 rubles,” — said Tkachuk.

We will remind, in April the conclusion only 6% of foreign capital from BFL (130 billion rubles) triggered a 10% jump in the dollar and the Euro.

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