Russian Finance Ministry Places OFZ Worth 8.05 Trillion Rubles at Face Value in 2025
Russia's Finance Ministry placed federal loan bonds (OFZ) at auctions and through additional placements totaling 8.05 trillion rubles at face value in 2025, according to the ministry's data. The borrowing campaign combined regular auctions with follow-up offerings of government securities throughout the year.
Full-year result: 8.05 trillion rubles at face value
At the last auctions of the year, the Finance Ministry offered investors two fixed-coupon OFZ issues — series 26252 maturing in October 2033 and series 26250 maturing in June 2037 — in the amount of the remaining balances available for placement in each issue.
The final December auctions
Demand and placed volumes
- OFZ series 26252: 64.577 billion rubles placed at face value against demand of 86.367 billion rubles;
- OFZ series 26250: 20.703 billion rubles placed at face value against demand of 31.536 billion rubles;
- additional placement after the auction: another 4.59 billion rubles of OFZ 26252 and 259.4 million rubles of OFZ 26250.
The Bank of Russia decision and the market reaction
The backdrop for the closing auctions was set by the Bank of Russia, which cut the key rate by 50 basis points to 16% per annum — a more restrictive step than the market had expected. The regulator also noted the predominance of inflationary risks over the medium term amid persistently high inflation expectations, the effects of the VAT increase and deteriorating foreign trade conditions.
"At its meeting on Friday the Bank of Russia took a restrictive decision, cutting the key rate by 50 basis points to 16% per annum, contrary to market expectations of softer measures. The regulator also noted the predominance of inflationary risks over the medium-term horizon against the backdrop of persistently high inflation expectations, the effects of the VAT increase and deteriorating foreign trade conditions. This decision provoked a correction in both the debt and equity markets, which led to lower activity at the auctions," says Maxim Gladskikh, an analyst at TKB Investment Partners.
On the secondary OFZ market, prices of government bonds continued to rise in the middle of last week on the back of yet another positive inflation reading for the market; however, the anticipated key rate decision pushed OFZ prices down. Since the beginning of the current calendar week, the government securities market has been showing a sideways trend, notes Alexander Ermak, chief analyst for debt markets at BC Region.
The quarter: 95% of the plan in 12 auction days
Over the 12 auction days held in October–December, the Finance Ministry of the Russian Federation placed government bonds worth 3.6 trillion rubles, fulfilling 95% of the quarterly OFZ market borrowing plan, which stands at 3.8 trillion rubles.
Domestic borrowing parameters for 2025
Russia's planned domestic state borrowings for 2025 were raised by budget amendments by 2.2 trillion rubles, to 6.981 trillion. The key parameters of the borrowing program are as follows:
- Placement of Russian state securities with a face value denominated in Russian currency was planned at 6.981 trillion rubles, compared with the 4.781 trillion previously provided for in the budget law.
- Redemption of Russian state securities with a face value denominated in Russian currency remained at 1.416 trillion rubles.
- The net borrowing volume was therefore expected at 5.565 trillion rubles.
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