Page 13 - RUSRptSept18

bond sales were “missing” but concluded the money had most likely been moved to Belgium and the Cayman Isles.
Below is an extract from their post.
“Let us start with US Treasury Department data on holdings of Treasury securities. These do indeed show an $81bn (84%) plunge in Russian-held Treasury debt—from $96bn in March to $15bn in May. Other figures, however, suggest that Russia’s actual selloff was much smaller than this.
One indicator is Treasury Department data that track sales, between US and foreign entities, of long-term Treasuries—the sole component of Russia’s Treasury holdings that has dropped since March. From March to May, these data show just $35bn of Russian sales, as the middle bar in the left-hand box above indicates.
This figure, however, likely underestimates Russia’s sales somewhat. Russia may have sold some Treasuries to non-US parties, or executed some sales through foreign financial intermediaries, that the data do not capture. Still, by this measure, roughly $46bn in Treasuries remain unaccounted for.
Russian data show a similar amount missing. Russia’s central bank reports that, between March and May, its total stock of foreign debt fell by $50bn. Since March, however, dollar appreciation has lowered the dollar value of Russia’s non-dollar debt assets. We estimate that this explains about $7bn of the decline, implying $43bn in actual Treasury sales—as the rightmost bar above shows. This is $8bn more than the US data indicate, which likely reflects about $8bn in Russian sales to non-US entities, or sales made through foreign intermediaries.
This leaves $38bn in “missing” Treasuries. Where could they have gone? The most logical explanation is that Russia moved these assets outside of the United States to protect against US seizure.
The two most likely destinations would be Belgium, home to custodian bank Euroclear, and the Cayman Islands. So we looked at data from both.
Sure enough, during April and May, as shown in the right-hand figures, Belgian holdings of Treasuries rose $25bn, while Cayman Islands holdings rose $20bn. That sum, $45bn, is more than enough to account for the missing $38bn.
In short, Russia appears to have sold only about 45% of its Treasury holdings—substantial, but far less than the 84% the media is reporting.
13 RUSSIA Country Report September 2018 www.intellinews.com