Finance Ministry cancels public debt auctions amid market collapse

The Ministry of Finance will not hold traditional federal loan bond (OFZ) auctions, which were scheduled for Wednesday, January 19. This is stated in the message of the Ministry of Finance.

The decision was made "due to the increased volatility in the financial markets" and "in order to help stabilize the market situation," the ministry said. The last time the Ministry of Finance canceled OFZ auctions was in November 2021.

This measure did not come as a surprise. “On Monday morning, the OFZs tried to partially compensate for the losses of the last days, but the buying activity quickly subsided. The stock closed up 10–20 bp in yield. Similar dynamics was observed in similar bonds of emerging market countries: yields of ten-year bonds rose by 2-15 bp,” Sberbank analysts wrote in the morning review of the markets. They predicted that the Finance Ministry would likely cancel auctions to help stabilize the market.

The RGBI government bond index on Tuesday, January 18, by 15:25 Moscow time, fell by 0.25% compared to the close of the previous day, to 128.7 points. Back in early January, it was trading above 130 points.