Russia Cancels Bond Auctions as 8 Trillion-Ruble Deficit Drives Borrowing Strain
Updated
Updated · The Moscow Times · Jul 29
Russia Cancels Bond Auctions as 8 Trillion-Ruble Deficit Drives Borrowing Strain
2 articles · Updated · The Moscow Times · Jul 29
Summary
July bond auctions were canceled indefinitely after Russia’s Finance Ministry refused to sell new OFZ debt at yields above the 14% key rate, leaving its third-quarter borrowing plan badly off track.
Only 8.8 billion rubles has been raised against a 1.5 trillion-ruble quarterly target as debt-service costs hit 3.9 trillion rubles this year and the budget deficit is now seen reaching 8 trillion rubles.
The strain reflects surging war spending, weaker tax growth and uncertainty over oil revenue, even after the central bank cut rates by just 0.25 point and warned inflation risks still dominate.
Officials can still tap the National Wealth Fund, Treasury balances and state banks such as Sberbank and VTB, but economists cited in the report warn debt sustainability could worsen sharply after year-end.
If the war drags on, the report says Russia may eventually resort to ruble devaluation, debt restructuring or freezing bond payments—steps that would shift pressure onto already weakened banks and households.