Page 104 - RusRPTSept23

Companies are continuing the trend of replacing eurobonds with local securities denominated in US dollars and other "toxic" currencies but with repayment in rubles. An estimated 120bn rubles' worth of such securities were issued in ruble equivalents in July, reflecting this ongoing shift.
This dynamic environment suggests a growing interest in various types of debt securities, as well as a strategic repositioning towards more locally focused investments, reflecting the broader economic and financial trends in the market.
GOVERNMENT FUNDS: Significant growth in government funds continued in July, with an increase of 1.1 trillion rubles (+9.9%). This growth was primarily driven by the Financial Commission's efforts, contributing 1.0 trillion rubles, of which approximately 50% were sourced through repurchase agreements (repos).
The surge in government funds was underpinned by inflows from major taxes such as personal income tax (NDFL), value-added tax (VAT), corporate income tax, and oil and gas taxes. Additionally, the issuance of federal government bonds (OFZ) played a significant role in bolstering government funds (see page 6 for details).
As a result, the total volume of government funds reached 12.1 trillion rubles, constituting approximately 9% of the sector's obligations. This substantial increase in government funds marks a continued trend in the financial landscape.
8.1.7 Banks specific issues
The Central Bank is working on a standard for mortgage lending, which may become mandatory for all banks, said Alexander Danilov, director of the department of banking regulation and analytics of the regulator, in an interview with IRN.RU. The document is being developed by the Central Bank only for banks, but will be available for borrowers, Danilov said. The Central Bank began to resolve the issue with a risky mortgage from a developer in a dialogue with banks and developers, and at first “tried to convince them,” Danilov said. As a result, the Bank of Russia still had to tighten regulation. But the Central Bank “does not leave hope” that they will be able to find a format for dialogue with the banking community in order to anticipate risks without introducing regulatory measures and create “correct guidelines” in the market, Danilov explained the essence of the idea of the regulator.
RUSSIA Country Report September 2023 www.intellinews.com