Russian Bond Yields Rise to 4-Month High Before Rates Decision

Russia’s long-term government ruble bonds declined, pushing yields to the highest level in almost four months, before the central bank meets on interest rates tomorrow.

The yield on OFZ bonds due February 2027 rose eight basis points, or 0.08 percentage point, to 7.45 percent by 7 p.m. in Moscow, the highest since November 20.

Policy makers will probably leave borrowing costs unchanged for a sixth month at a meeting tomorrow, according to a Bloomberg survey of 28 economists. Inflation accelerated to 7.3 percent in February from 7.1 percent in January, the state statistics service said this month.

“No one wants to buy while inflation is at a local peak,” Yulia Safarbakova, a fixed-income analyst at BCS Financial Group, said by phone. “We need to see an implicit deceleration for investors to react.”

The ruble strengthened 0.1 percent against the dollar to 30.7600 and also gained 0.1 percent against Bank Rossii’s dollar-euro basket to 34.8582. Oil in New York added 0.2 percent to $92.71 a barrel. Crude and natural gas account for about 50 percent of Russia’s budget revenue.

The regular monthly tax period, which starts tomorrow, may provide support for the Russian currency in the near term as exporters sell foreign currency to transfer rubles to the federal budget, Dmitry Polevoy and Egor Fedorov, analysts at ING Groep NV’s Moscow unit, said in a note to clients.

HSBC Holdings Plc (HSBA) forecast 350 billion rubles of obligatory insurance contributions on March 15, according to a March 4 note.

To contact the reporter on this story: Vladimir Kuznetsov in Moscow at vkuznetsov2@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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