According to the macro analyst of Raiffeisenbank Stanislav Murashov, extension of limits on borrowing for 2019-2021 years it took to complete new the may decree of President Vladimir Putin — at the expense of OFZ will be partially deposited into the development Fund intended for the implementation of infrastructure investment. In addition, next year is expected to increase the cost of repayment of a number of OFZ issues — to this end the authorities will also need additional tools that can be brought on the bond market. Moreover, in 2019, the Ministry of Finance with high probability will return to the open market to buy the currency after the moratorium of the Central Bank, and this additional spending.
According to the macro analyst of Raiffeisenbank Stanislav Murashov, the borrowing program of the Ministry of Finance is not a hard commitment, and the Ministry of Finance will not be disappointed if you do not fulfill it, especially in the current favourable budget conditions. Besides, now because of the threat of sanctions on the participation of non-residents in debt it is unlikely that such a large-scale program relevant, says Murashov. “If the Ministry of Finance will not execute the program, the Ministry could do more modest amounts of funds in terms of budget surplus. Might use and investment of funds of the NWF”, — said the macro analyst.
In theory, the increase of limits on placement of public debt can indeed lead to an increase in rates, but you have to understand that budgeting the government was engaged in the summer, and so the project was formed before the events of August-September, says the chief economist of Nordea Bank Tatiana Evdokimova. “The Central Bank recommended that the Ministry of Finance to prepare a stress scenario in which the Agency will not be able to borrow on the domestic market in China. Also representatives of the Ministry of Finance has repeatedly said that they are not ready to borrow at any rate,” — said Evdokimov.
Because such risks exist, I agree and Murashov. According to him, the Ministry of Finance is unlikely to place public debt on unfavorable conditions, but even if that happens — a negative effect on the debt market will be small. “If the pressure on profitability and happens — it will have little effect on the investment projects of the companies. According to our observations, the dynamics of interest rates does not have much impact on investment because funds for such projects are mostly channelled from the profits of companies and not through the issuance of debt,” — said the analyst.
General Director of “Sputnik — capital Management” Alexander Losev said that the surplus liquidity in the banking system can help the Ministry of Finance to execute any plan for the borrowing. Thus, in his opinion, the yield on government bonds does not match the current risks, including currency, and should be higher.
“The yield on the ten-year OFZ bonds is 8.5%, although at current levels the currency pair dollar-ruble and risks of further devaluation of the real returns of these securities should be 10-12% in 2015,” says Losev.
He notes that the cost of borrowing for companies and regions will not influence the placement of new OFZ, and the decision (if adopted) to buy foreign currency to replenish the NWF on the open market from 2019, and the situation in the global economy — fed rate hike and outflows of funds from emerging markets.