November 28, 2017, 19:11 / Economy / News

The Central Bank spoke about the possible effect of US sanctions against Russia's national debt

American sanctions on Russia's national debt can only have a short-term impact. The Central Bank of Russia, if necessary, is ready to use its instruments to reduce the negative effect. This was announced by the first deputy chairman of the regulator, Ksenia Yudaeva.

“There may be some volatility,” she noted. However, in Russia, “heterogeneous activity of foreigners in the market, some fluctuations and suspensions occur all the time, this does not always cause any serious surges,” Yudaeva explained. According to her, the Central Bank has never needed to intervene in a situation.

As Yudaeva noted, as of October 1 this year, the share of non-residents in the OFZ market amounted to a record 33.2%.

At the same time, as Bloomberg writes , citing experts, the cost of borrowing will increase by 50-150 basis points if the US authorities expand sanctions. Moscow is downplaying the significance of the expansion of sanctions, believing that domestic demand will compensate for the outflow of foreign investors, who currently account for at least 30% of investments in OFZs, the agency notes.

“New sanctions against Russia could force foreign investors to completely abandon the purchase of new government bonds, which will lead to a strong increase in borrowing costs for Russia,” said Vladimir Miklashevsky, senior economist at Danske Bank A/S in Helsinki.