Are Russians interested in Finance Ministry's OFZ bonds?
The project of issuing "people's" OFZ bonds, announced by Russia's Ministry of Finance on Monday, raises a lot of questions and looks fishy rather than appealing for the public, economists Sergey Hestanov and Vasily Yakimkin said in an interview with Vestnik Kavkaza.
Reuters wrote on Monday, that Russia's finance ministry announced it will start selling ruble treasury bonds for households in April. The finance ministry aims at raising up to 30 billion ($519 million) rubles a year by selling bonds, known as OFZ bonds for people. The new three-year bonds will have a yield of 8.5 percent and will be issued every six months, available at offices of Russia's largest lenders Sberbank and VTB.
Sergey Hestanov drew attention to the fact that ordinary OFZ bonds, which exist for a long time and traded on the market pretty well look much more profitable than "people's" OFZ bonds.
"Restriction on new bonds looks irrational and very inconvenient for citizens. The majority of people interested in such instrument won't buy "people's" OFZ bonds, but ordinary ones, since they are available for purchase for private individuals for a long time already," he expects.
The expert added that it's unclear why the Finance Ministry chose such uncomfortable conditions for new bonds.
Vasily Yakimkin explained current conditions, set by the Ministry, by its expectations that Russian Central Bank's interest rate will be lowered, which will make new bonds extremely profitable.
"This will happen if the interest rate will be lowered to 5-6%, but at the current level, these bonds are useless, and even at the level of 8% they don't make much sense and the country won't be able to attract more than 30 billion rubles," he predicts.