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CB Expects Rouble Bond Market Growth

07.10.2015 12:00 / Interfax

Central Bank’s First Deputy Chairman Sergey Shvetsov expects growth in Rouble bond market activity.

“I think that activity in the Rouble bond market is set to grow, because the turmoil in economy is calming down. I think we have passed the lowest ebb and as the Bank of Russia lowers the interest rates and yield curves stabilize, issuers will develop an appetite for bonds”, Shvetsov told the press at the MOEX Forum.

He pointed out that the CB is currently developing new bond market instruments, including a short-term corporate bonds program.

“I think we will promote this instrument next year. I hope that we will give Russia a short-term bond market”, said Shvetsov.

He said that the short-term bond program will be fully included in the CB Lombard List.

“Today, it is less important whether securities are in the Lombard List or not, less than 40% of them have been pledged, there is a lot of free collateral about. When MOEX launches centralized clearing for OTC derivatives, collateral will be in demand. I see next year as balanced – we will no longer see extremes, when up to 80% of the bond market belonged to the Bank of Russia as REPO collateral, there will be more liquidity in the market”, added Shvetsov.

He stressed that the regulator will pave the way for bonds to replace bank financing for top tier business, since high-ranking performers are well suited for the capital market, where loans are cheaper.

“I think more prime-borrowers will be leaving the banking sector, giving a boost to the bond market”, said Shvetsov.

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