The Russian Ministry of Finance indefinitely suspends state bond auctions, the main instrument for financing the budget deficit.
According to the institution, the measure was taken “to contribute to the stabilization of the market situation”. Bond auctions traditionally took place every Wednesday.
The decision comes after the price of government bonds has dropped significantly in recent weeks. Since the second half of June, the index of Russian state bonds has reached its lowest level in the last year, and the yields of titles with maturities of over 10 years have exceeded 16.5% per year.
The increase in yields means that the Russian state must pay ever higher interest to borrow from the market, which increases the cost of financing the budget deficit.
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