Russian rouble edges up on OFZ bond auctions


MOSCOW, May 22 (Reuters) - The Russian rouble edged up as the finance ministry sold $1.44 billion in OFZ treasury bonds on Wednesday, which in recent months have drawn significant foreign demand.

At 1415 GMT the rouble was up 0.2% against the dollar to 64.28 and had also gained 0.2% to 71.76 against the euro, trading at levels seen in late April.

Demand for the rouble-denominated OFZ bonds, which serves as a gauge for global market sentiment, has been supported by expectations of a rate cut by the Russian central bank in the near future, as well as rising oil prices.

OFZ bonds got a boost after the finance ministry said that it could reduce its offerings of OFZ bonds in the second half of the year because high demand so far in 2019 has allowed it to fulfil its borrowing plan faster than expected.

Commenting on a possible impact for the rouble, Arnak Grigoryan, an analyst at Citibank in Moscow, said the ministry's plan to limit its offerings in the second half of 2019 would translate into less support for the Russian currency than in the first six months of the year.

"We can expect that the high demand for OFZ bonds from foreign investors, which had supported the rouble in the first half of the year, will have a smaller effect in the second half of the year," he said.

Russia's central bank said that foreign investors were behind 41.6% of auction bids for the bonds last month.

Russian stock indexes were slightly higher. The dollar-denominated RTS index was up 1.2% to 1,294.2 points. The rouble-based MOEX Russian index gained 0.1% to 2,641.3 points.

($1 = 64.2820 roubles)

This article appears in: Politics , Fundamental Analysis , Stocks , World Markets

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