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Weekly Lists
December 7, 2018 www.intellinews.com I Page 33
bne:Credit
Russia's finance ministry defies international tensions, places RUB20bn of OFZ bonds
Polish rate setters go back deep in wait and see mode
Russia's finance ministry placed RUB20bn ($300mn) in two OFZ federal bonds auctions on December 5 out of RUB25bn proposed, as demand for OFZs recovered from recent crisis related wobbles. RUB15bn of 11-year bonds were almost fully placed, and RUB5.2bn were placed out of RUB10bn of six-year bonds offered.
The finance ministry offered a larger supply of bonds than recently, despite an international scandal following a naval clash between Russian and Ukrainian ships on the Sea of Azov on November 25. The Ministry of Finance has reduced the amount of bonds offered to RUB10bn on occasion or cancelled the auctions completely in the last months due to flaring international tensions so the RUB25bn worth of bonds on offer only one week after the Azov incident was seen as a bold move.
Poland’s Monetary Policy Council (MPC) left interest rates at their current record low of 1.5% on December 7, dropping any hints of tightening monetary policy after flash inflation reading surprised to the downside last week.
Fast economic growth accompanied by only moderate inflation provide no premises for a change in monetary policy at the moment, the MPC said in the statement following the decision. CPI growth came in at just 1.2% y/y in November, a drop of 0.6pp compared to the annual expansion in October, a flash estimate showed on November 30.
The Turkish lira (TRY) lost around 3% d/d against the dollar oon December 4, prompting analysts to call on Turkey’s central bank to reiterate an intention to stick with tight monetary policy ahead of the local elections due in March 2019.
Traders fretting about a premature interest rate cut amid the politi- cal pressure of campaigning in what is likely to be a recession-hit environment, as well as a rally in oil prices — Turkey is a big energy importer — were clearly two factors as the embattled currency felt renewed pressure.
Turkish lira under renewed pressure
on fears of premature rate cut ahead of local elections