Page 132 - RusRPTJul22

sovereign debt, so-called OFZ. While sanctions and capital controls mean that non-residents will not be able to unload their positions or take repayments out of the country (foreign holdings remained broadly stable in March and April), new investments will not occur for the foreseeable future. Thus, the Russian government will have to rely on domestic financial institutions to finance budget deficits, which are likely to grow both due to an expected collapse in revenues as well as war-related expenditure increases. For the time being, credit institutions’ holdings of government debt securities as a share of total banking system assets remain relatively low in historical comparison, and should allow for further domestic absorption of OFZ issuance.
132 RUSSIA Country Report October 2020 www.intellinews.com