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О КЛЮЧЕВОЙ СТАВКЕ
Bank of Russia
March 2017
RUSSIAN ECONOMIC OUTLOOK AND CHALLENGES TO MONETARY POLICY
BANK OF RUSSIA
Oil Market Rebalancing and Extraction Growth in the US lead to a New Oil Price Path in the Baseline Forecast
2
-1,6
-1,2
-0,8
-0,4
0,0
0,4
0,8
1,2
1,6
2,0
2,4
2,8
80
82
84
86
88
90
92
94
96
98
100
102
I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV
2012 2013 2014 2015 2016 2017 2018
Stock Change and Balance World Production
World Consumption
Source: US Energy Information Administration
World liquid fuels production and consumption
balance, million barrels per day (MMb/d)
30
35
40
45
50
55
60
65
70
75
80
20
30
40
50
60
70
80
90
100
110
120
01.14 09.14 05.15 01.16 09.16 05.17 01.18 09.18
RU
B/U
SD
US
D p
er
barr
el
Urals oil price, fact
Urals oil price, December baseline forecast
Urals oil price, March baseline forecast
USDRUB (right axis)
Sources: Bank of Russia, Reuters, Bloomberg
Oil price (fact VS forecast) and ruble exchange rate
BANK OF RUSSIA
Given the Gradual Monetary Policy Normalization in the US, Emerging Markets Continue to Attract Foreign Investment
3
Source: Institute of International Finance
-0,25
0,00
0,25
0,50
0,75
1,00
1,25
1,50
-0,25
0,00
0,25
0,50
0,75
1,00
1,25
1,50
01.13 08.13 03.14 10.14 05.15 12.15 07.16 02.17 09.17
Key central banks rates, %
US FED Federal Funds Rate - Upper Bound
FED rate Bloomberg forecast
ECB Main Refinancing Rate
ECB rate Bloomberg forecast Source: Bloomberg
BANK OF RUSSIA
Current Account Surplus is Sufficient to Cover Payments on External Debt. Banks Will Be Able to Repay Their Current Debt on Bank of Russia’s Foreign Currency Refinancing Operations by the end of 2017
4
-150
-125
-100
-75
-50
-25
0
25
50
75
1Q
2007
3Q
2007
1Q
2008
3Q
2008
1Q
2009
3Q
2009
1Q
2010
3Q
2010
1Q
2011
3Q
2011
1Q
2012
3Q
2012
1Q
2013
3Q
2013
1Q
2014
3Q
2014
1Q
2015
3Q
2015
1Q
2016
3Q
2016
Balance of payments structure, bln USD
Current account Capital account
Financial account Net errors and omissions
Net private capital outflow Change in FX reserves
Source: Bank of Russia
0
5
10
15
20
25
30
35
40
01.15 03.15 06.15 09.15 12.15 03.16 06.16 09.16 12.16 03.17
Bank of Russia Refinancing Operations, bln USD
1Y FX Repo 1M FX Repo 1W FX Repo
1M FX Loans 1Y FX Loans
Total of 4,8 bln USD
as of March 27th 2017
Source: Bank of Russia
BANK OF RUSSIA 5
Monetary Conditions Continue to Ease in Nominal Terms but in Real Terms Remain Moderately Tight
-60
-40
-20
0
20
40
60
80
-60
-40
-20
0
20
40
60
80
I II III IV I II III IV I II III IV I II III IV I II III IV I II
2012 2013 2014 2015 2016 2017
Loans to large enterprises
Loans to small and medium companies
Consumer loans
Mortgage loans
Tightening
Easing
Source: Bank of Russia.
Expectations
Indices of Сhanges in Bank Lending Conditions, p.p.
-10
-5
0
5
10
15
20
-10
-5
0
5
10
15
20
Jan.14 July.14 Jan.15 July.15 Jan.16 July.16 Jan.17
Interest Rates Dynamics, % p.a.
Nominal long-term corporate loan rate
Nominal long-term household deposit rate
Real long-term corporate loan rate
Real long-term household deposit rate
O/n interbank rate (MIACR)
Source: Bank of Russia.
BANK OF RUSSIA 6
Cautious Behaviour of Banks and Borrowers and Moderately Tight Monetary Conditions Constrain Lending Growth
Dollarisation of Loan Portfolio (%)
1.01.14 1.01.15 1.01.16 1.01.17 1.02.17 1.03.17
Loans to non-
financial
organizations
24,0 33,2 39,8 32,2 31,9 30,2
Loans to households 2,4 2,7 2,7 1,5 1,4 1,3
Total 17,3 24,8 30,8 24,1 23,9 22,5
-15
-10
-5
0
5
10
15
20
25
30
-15
-10
-5
0
5
10
15
20
25
30
2014 2015 2016 2017Revaluation of foreign currency loansLoans to householdsForeign currency loans to non-financial organisationsRuble loans to non-financial organisationsTotal loan portfolio, %Growth rate of loans to non-financial ogranisations, % *Growth rate of loans to households, % *
Source: Bank of Russia. * excluding foreign currency
Contributions of Various Components to the Annual Growth Rates of Bank Loans to Households and Non-Financial Organizations, p.p
Dollarisation of Deposits (%)
1.01.14 1.01.15 1.01.16 1.01.17 1.02.17 1.03.17
Household deposits 17,4 26,1 29,4 23,7 23,7 22,8
Corporate deposits
and current accounts 31,3 42,6 47,3 39,5 40,1 38,3
Total 24,5 35,5 39,2 31,7 32,3 30,9
0
2
4
6
8
10
12
14
16
18
2014 2015 2016 2017
Overdue Loans (as % of Loan Portfolio)
Loans to non-financial organisationsLoans to non-financial organisations (30 largest banks)Loans to non-financial organisations (other banks)Loans to householdsLoans to households (30 largest banks)Loans to households (other banks)
Source: Bank of Russia.
BANK OF RUSSIA 7
Economic Recovery Goes On Faster than Previously Projected
-3,5
-3
-2,5
-2
-1,5
-1
-0,5
0
0,5
1
1,5
-3,5
-3
-2,5
-2
-1,5
-1
-0,5
0
0,5
1
1,5
2014 2015 2016
Divergence between produced and used GDP Net export
Inventory change Gross capital formation
Government consumption Household consumption
GDP old (2016 - the Bank of Russia estimate), %, RHS GDP new, %, RHS
Change in GDP decomposition, p.p.
Sources: Rosstat, Bank of Russia calculations
BANK OF RUSSIA 8
Industrial Production Growth Persists But Still Lacks Consistency Across Sectors
-3,0
-2,0
-1,0
0,0
1,0
2,0
3,0
4,0
-3,0
-2,0
-1,0
0,0
1,0
2,0
3,0
4,0
01.14 05.14 09.14 01.15 05.15 09.15 01.16 05.16 09.16 01.17
Mining
Manufacturing
Utilities (before 2015)
Utilities: electricity, gaz and steam (from 2015)
Utilities: water, pollution control activities (from 2015)
Omissions
Industrial production, (%, RHS)
Industrial Production Dynamics and its Decomposition with exclusion of calendar factor, %
Sources: Rosstat, Bank of Russia calculations
-15
-10
-5
0
5
10
15
20
-15
-10
-5
0
5
10
15
20
01.14 06.14 11.14 04.15 09.15 02.16 07.16 12.16
Output in Manufacturing, % (YoY)
Food industry
Other manufacturing
Chemical industry
Sources: Rosstat, Bank of Russia calculations
BANK OF RUSSIA
Investment Activity Shows Signs of Recovery
9
-15
-10
-5
0
5
10
15
I.2
011
II.2
01
1
III.
201
1
IV.2
011
I.2
012
II.2
01
2
III.
201
2
IV.2
012
I.2
013
II.2
01
3
III.
201
3
IV.2
013
I.2
014
II.2
01
4
III.
201
4
IV.2
014
I.2
015
II.2
01
5
III.
201
5
IV.2
015
I.2
016
II.2
01
6
III.
201
6
IV.2
016
Private sectorInfrastructure companiesGovernment sectorFixed capital investment, (%, RHS)
Government and Private Fixed Capital Investment (YoY), %
Sources: Rosstat, Bank of Russia calculations
-60
-40
-20
0
20
40
60
-20
-15
-10
-5
0
5
10
01.15 04.15 07.15 10.15 01.16 04.16 07.16 10.16 01.17
Fixed capital investment (quarterly)
Construction
Production of investment goods
Machinery and equipment import, (RHS)
Fixed Capital Investment and Construction (YoY), %
Sources: Rosstat, Bank of Russia calculations
BANK OF RUSSIA 10
Households Still Maintain Their Propensity to Save While Consumer Demand Shows Signs of Recovery
-0,05
0,00
0,05
0,10
0,15
0,20
-0,05
0,00
0,05
0,10
0,15
0,20
01.15 04.15 07.15 10.15 01.16 04.16 07.16 10.16
Equity
Borrowing
Currency assets (currency, deposits)
Ruble financial assets (deposits, stocks, cash)
Savings rate
Components of Savings Rate (Seasonally Adjusted), Share of Income
Source: Rosstat, Bank of Russia calculations
85%
90%
95%
100%
105%
110%
85%
90%
95%
100%
105%
110%
2013 2014 2015 2016 2017
Real wage
Real disposable income
Retail trade turnover
Real Wages, Household Income Dynamics and Retail Trade Turnover (Seasonally Adjusted), 2013 = 100%
Source: Rosstat, Bank of Russia calculations
BANK OF RUSSIA 11
Inflation Slowdown Overshoots the Baseline Forecast Amid Ruble Appreciation, Bumper Harvests and Weak Consumer Demand
0
4
8
12
16
20
24
0
4
8
12
16
20
24
01.15 04.15 07.15 10.15 01.16 04.16 07.16 10.16 01.17
Inflation, % (YoY)
CPI Core inflation Non-food goods
Food goods Services
Source: Rosstat
0
5
10
15
20
0
5
10
15
20
I II III IV I II III IV I II III IV
2015 2016 2017
Actual inflation Baseline inflation forecast
Actual and Projected Inflation (End of Quarter, YoY), %
Source: Rosstat, Bank of Russia calculation
BANK OF RUSSIA
Inflation Expectations Decline, But in an Unstable Manner
12
Sources: FOM, REB, Rosstat, Bank of Russia, Bloomberg, Interfax, Reuters
Expectations horizon I.2014 II.2014 III.2014 IV.2014 I.2015 II.2015 III.2015 IV.2015 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Graph
next 12 months 11,8 11,7 12,5 15,5 15,7 15,0 16,0 16,4 16,7 15,7 14,7 14,6 13,6 14,2 14,3 12,6 14,2 12,3 13,7 12,4 11,5 12,9 11,2
next 12 months 8,1 9,0 9,6 14,4 13,8 12,2 14,5 12,8 10,8 7,8 7,4 7,2 6,5 6,7 6,9 6,4 5,9 5,8 5,6 5,1 4,6 4,4 4,1
2017 6,0 4,7 5,4 5,4 5,2 5,0 4,5 4,5 4,4 4,3
2017 6 5,6 5,7 5,7 5,7 5,5 5,5 5,1 4,9 4,8 4,8 4,7 4,7 4,4
2017 4,8 5,1 5,1 4,8 4,5 4,6 4,1 4,3
next 7 years 6,4 5,8 6,2 6,1 5,4 5,2 5,0 4,6 4,6 4,4 4,5 4,5 4,8 4,6 4,6 4,5 4,6
OFZ IN (option not substracted) next 7 years 8,1 7,3 7,7 7,6 6,9 6,7 6,5 6,0 5,8 5,5 5,3 5,5 5,8 5,4 5,0 4,9 5,0
Bond market next quarter 6,9 7,0 7,7 8,3 10,6 15,0 14,1 14,2 #Н/Д #Н/Д 12,3 #Н/Д #Н/Д 7,1 #Н/Д #Н/Д 7,5 #Н/Д #Н/Д 6,8
next quarter 6,7 7,5 8,2 10,2 14,8 17,1 15,0 13,6 #Н/Д #Н/Д 10,0 #Н/Д #Н/Д 6,2 #Н/Д #Н/Д 6,2 #Н/Д #Н/Д 6,0
next 12 months 84 85 84 83 76 72 80 83 85 82 84 83 81 78 82 77 82 78 79 80 80 83 79
next month 79 82 76 77 68 60 71 78 80 76 72 74 70 68 72 69 70 70 74 76 72 72 68
next 3 months 26 26 32 70 32 20 28 48 46 22 14 16 30 38 28 26 36 34 32 46
next 3 months 14,3 12,4 13,9 30,3 14,8 12,7 12,1 17,3 15,6 13,6 12,4 11,5 11,5 12,1 10,1 9,9 10,4 10,1 11,5
next quarter 42 41 41 43 31 28 30 29 #Н/Д #Н/Д 32 #Н/Д #Н/Д 29 #Н/Д #Н/Д 28 #Н/Д #Н/Д 27
next quarter 6 5 2 5 7 6 2 2 #Н/Д #Н/Д 5 #Н/Д #Н/Д 5 #Н/Д #Н/Д 0 #Н/Д #Н/Д 0
Change against 3MMA:
- inflation expectations become better (more than 1 standard deviation)
- inflation expectations become better (less than 1 standard deviation)
- inflation expectations unchanged (±0,2 standard deviation)
- inflation expectations become worse (less than 1 standard deviation)
- inflation expectations become worse (more than 1 standard deviation)
*Balanced index is the difference between the shares of those who expect prices to rise and to fall
Tariffs (Rosstat)
FOM
Businesses
REB
Bank of Russia
Retail prices (Rosstat)
OFZ IN
Interbank market
Inflation expectations (balanced index*)
Households
FOM
Professional analysts
Bloomberg
Interfax
Reuters
Financial markets
Survey
Inflation expectations (absolute value), %
Households
FOM
FOM (Bank of Russia calculations)
BANK OF RUSSIA
Fiscal Policy: The Ministry of Finance Adheres to Fiscal Consolidation and Plans to Develop Fiscal Rules
13
Conservative Fiscal Policy in 2016-2019: Budget Deficit Reduction from 3% in 2017 to 2% in 2018 and 1% in 2019.
New Fiscal Rules in 2017-2019: Sterilization of Extra Oil and Gas Revenues (due to Urals Price Being above $40 per barrel) and their Accumulation in the Reserve Fund
via the purchases of foreign currency in the domestic FX market. The volume of foreign currency purchases will be ₽183,6 bln in
February-March while the Reserve Fund is not used for budget deficit financing.
Borrowing as a Source of Financing Public Expenditures instead of the Reserve Fund: Gross placement of eurobonds in 2017 – $7 bln. Net Placement of OFZ in 2016 – 2019 will amount to ₽1,05 trln annually.
Further Fulfilment of Privatization Plans: “ALROSA”, “Bashneft”, “Rosneft” in 2016 and “VTB”, “NCSP”, “Sovkomflot” in 2017.
Ahead of Schedule Budget Execution at the beginning of the Year:
One-off payment to pensioners of ₽5000 and indexation of pensions by 5,4% in February and by 0,4% in April lead to considerably higher
social expenditures at the beginning of 2017 and to a budget deficit during the first two months of the current year.
Main Indicators of the Federal Budget
Federal budget Jan-Feb 2017 (moving average over
last 12 months)
2017
(Bank of Russia estimates in
baseline scenario – Urals
48$/brl)
Revenues, % of GDP 16,5 15,4
Expenditures, % of GDP 20,1 18,2
Deficit, % of GDP -3,6 -2,8
Net using (spending – accumulation) of the Reserve Fund
resources, ₽ trln
-0,11 0,75
BANK OF RUSSIA
Uncertainty About the Future of Oil Price Dynamics Persists. The Bank of Russia Considers 3 scenarios Sticking to Conservative Assumptions
14
20
30
40
50
60
70
80
90
100
110
2013 2014 2015 2016 2017 2018 2019
Bank of Russia, Urals, Optimistic scenario
Bank of Russia, Urals, Baseline scenario
Bank of Russia, Urals, Risk scenario
Oil price forecast*
Note: grey area reflects the range of oil price forecasts made by international organizations and independent analysts and oil prices actually observed in
previous years. The forecasts are made for oil grades: Brent, Dubai, WTI.
* As presented in Monetary Policy Report №1 (March 2017).
Sources: Bank of Russia, US Energy Information Administration, World Bank, IMF, The Economist, Consensus Economics, Reuters.
USD per barrel
BANK OF RUSSIA
Baseline Scenario: Gradual Economic Recovery, Inflation Slowdown to 4% by the end of 2017 and Its Retention Close to the Target in the Future
15
*As presented in Monetary Policy Report №1 (March 2017)
BANK OF RUSSIA
Baseline Scenario: The Key Changes in the Updated Forecast Mainly Touch Upon 2017. The Medium-Term Outlook on the Russian Economy Has Not Changed
16
Source: Bank of Russia. *As presented in Monetary Policy Report №1 (March 2017)
as % of previous year (unless indicated otherwise) 2016 (actual) 2017 2018 2019
Baseline*
Urals crude price (annual average), US dollars per
barrel 42 50 40 40
Inflation, % in December year-on-year 5,4 4,0 4,0 4,0
Gross domestic product -0,2 1,0-1,5 1,0-1,5 1,5-2,0
Final Consumption Expenditure -3,8 1,5-2,0 1,7-2,2 1,8-2,3
- households -5,0 2,0-2,5 2,3-2,8 2,3-2,8
Gross formation 3,3 5,0-6,0 1,5-2,5 2,3-3,3
- gross fixed capital formation -1,4 2,3-2,8 1,7-2,2 2,3-2,8
Net exports 21 -(28,6-23,6) -(10,3-6,2) -(8,3-3,8)
- exports 2,3 2,0-2,5 0,5-1,0 1,0-1,5
- imports -5 8,2-8,7 3,0-3,5 2,8-3,3
Loans to non-financial organizations and households in
rubles and foreign currency -1,8 5-7 7-9 8-10
BANK OF RUSSIA
Baseline Scenario: Balance of Payments Forecast
17
*As presented in Monetary Policy Report №1 (March 2017). Signs according to BPM5 Source: Bank of Russia
Actual Baseline*
2016 2017 2018 2019
Current account 22 30 9 8
Balance of trade 88 101 79 80
Exports 279 316 298 307
Imports -191 -214 -220 -227
Balance of services -24 -29 -28 -29
Exports 50 53 56 57
Imports -74 -81 -83 -86
Balance of primary and secondary
income -41 -43 -43 -44
Capital account -1 0 0 0
Balance of current and capital
accounts 21 30 9 8
Financial account (except reserve
assets) -12 -7 -8 -7
General government and central bank 4 6 5 6
Private sector (including net errors and
omissions) -16 -12 -13 -13
Change in FX reserves ('+' -
decrease, '-' - increase) -8 -23 0 0
(Billions USD)
BANK OF RUSSIA
Monetary Policy in March 2017
18
Reducing the key rate from
10.00 to 9.75% p.a.*
“While assessing evolving inflation dynamics
and economic developments against the
forecast, the Bank of Russia admits the
possibility of cutting the key rate gradually
in coming Q2-Q3”
Decision
Monetary policy signal
Inflation slowdown overshooting the forecast creates a
safety factor for reaching the 4% inflation target
Inflation expectations continue to decline
Inflation risks:
• Inertia of inflation expectations
• Household’s shrinking propensity to save
• Volatility in the global commodity and financial markets
Steadier economic recovery does not create inflationary
pressure
Risks that inflation will miss the 4% target by the end of
2017 have slightly abated. Nevertheless, there are still
risks that inflation may fail to anchor at the target level in
the medium run
* - Bank of Russia Press-Release as of March 24th, 2017
BANK OF RUSSIA
Appendix
BANK OF RUSSIA
Performance Under Structural Excess Liquidity Since January 2017. The Bank of Russia Mostly Conducts Deposit Auctions
20
-1
1
3
5
7
9
11
13
-1200
-200
800
1800
2800
06.16 07.16 08.16 09.16 10.16 11.16 12.16 01.17 02.17 03.17
%
₽ b
ln
REPO auctions Deposit auctions
Standing deposit facilities Standing REPO facilities
Amount outstanding on other refinancing operations Interbank market O/N rate (MIACR)
BoR key rate (right-hand scale)
Bank of Russia Operations and the Dynamics of MIACR
Source: Bank of Russia
BANK OF RUSSIA
Overnight Rates Moved to the Upper Half of the Interest Rates Corridor. Net Position of Non-residents in the Ruble is Close to Zero
21
Sources: MICEX SE, Bank of Russia calculations
8,0
8,5
9,0
9,5
10,0
10,5
11,0
11,5
12,0
12,5
13,0
0
1000
2000
3000
4000
06.16 07.16 08.16 09.16 10.16 11.16 12.16 02.17 03.17
FX Swaps turnover Repo turnover
Interbank loans turnover O/N interbank loan rate
O/N repo rate O/N swap rate
Interest rate corridor bounds Interest rate
Interest rate corridor bounds
% ₽ Bln Interest Rates and Turnover on O/N Ruble
Segment of the Money Market
50
55
60
65
70
75
80
85
-300
-200
-100
0
100
200
300
12.15 01.16 03.16 05.16 07.16 08.16 10.16 11.16 01.17 03.17
₽/$ ₽ Bln Non-residents Net Borrowings on FX Swaps
O/N Swap Swap 2-90D
Swap > 90D USDRUB Spot
BANK OF RUSSIA
Bank Loans are the Main Source of Funding
22
Source: Bank of Russia
12,0% 19,6%
34,4%
31,1%
22,7%
16,5%
28,0%
3,9%
47,0%
13,6% 24,4% 43,0%
38,5% 22,8%
0,0%
12,5%
25,0%
37,5%
50,0%
62,5%
75,0%
87,5%
100,0%
-
5
10
15
20
25
30
35
40
Bank loans Shares Bonds Eurobonds Syndicated loans
₽ T
rilli
on
Sectoral structure of the Russian financial market Utilities
Telecommunications
Other
Oil & Gas
Industrials
Financials
ConsumerGoods&ServicesBasic Materials
Government bonds
21 18 16 13 11 9 8 6 6 7 8 7 7 8 9 10 15
5 5 8 10 9 11 13 14 14 14 13 12 13 16 20 23 21 17 28 34 44 40
63
94 98
27
60 65 43 38 36 30 36
44
0 1
1 2 3
5
7 9
10
10 8
7 8 11 13 14
13
11 14
16 18 20
20
23 28
30
32 27
24 26 28 29 37
41
0
20
40
60
80
100
120
140
160
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 01.01.2017
The Russian Financial Market (End of Period, % of GDP)
Government bonds Corporate debt securities Stock market capitalization Household loans Bank loans to non-financial organizations
BANK OF RUSSIA
Non-resident Purchases of OFZ Hit a New Record in March
23
Sources: MICEX SE, Bank of Russia calculations
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0
18,0
-100
-50
0
50
100
150
200
250
300
JA
N15
FE
B15
MA
R15
AP
R15
MA
Y1
5
JU
N15
JU
L15
AU
G1
5
SE
P15
OC
T1
5
NO
V1
5
DE
C15
JA
N16
FE
B16
MA
R16
AP
R16
MA
Y1
6
JU
N16
JU
L16
AU
G1
6
SE
P16
OC
T1
6
NO
V1
6
DE
C16
JA
N17
FE
B17
MA
R17
Government Bonds
Banks Subsidiaries of foreign banks Mutual funds Non-bank organizations Non-residents Systemically important banks Households Bond yield
Date Government
bonds
Regional
bonds Corporate bonds
Stock market
capitalization
2010 2,054 0,462 2,965 -
2011 2,803 0,424 3,437 -
2012 3,197 0,440 4,166 25,2
2013 3,635 0,499 5,189 25,3
2014 4,593 0,532 6,623 23,2
2015 4,991 0,576 8,068 28,8
2016 5,611 0,634 9,438 37,8
Feb.16 5,827 0,634 9,559 37,6
0
200
400
600
800
1000
1200
MA
Y1
4JU
N14
JU
L14
AU
G1
4S
EP
14
OC
T1
4N
OV
14
DE
C14
JA
N15
FE
B15
MA
R15
AP
R15
MA
Y1
5JU
N15
JU
L15
AU
G1
5S
EP
15
OC
T1
5N
OV
15
DE
C15
JA
N16
FE
B16
MA
R16
AP
R16
MA
Y1
6JU
N16
JU
L16
AU
G1
6S
EP
16
OC
T1
6N
OV
16
DE
C16
JA
N17
FE
B17
The Placement of Bonds on the Domestic Market (₽ bln)
Government bonds Corporate bonds Regional bonds
0,00
2,00
4,00
6,00
8,00
10,00
12,00
14,00
16,00
18,00
-100
0
100
200
300
400
500
600
JA
N15
FE
B15
MA
R15
AP
R15
MA
Y1
5
JU
N15
JU
L15
AU
G1
5
SE
P15
OC
T1
5
NO
V1
5
DE
C15
JA
N16
FE
B16
MA
R16
AP
R16
MA
Y1
6
JU
N16
JU
L16
AU
G1
6
SE
P16
OC
T1
6
NO
V1
6
DE
C16
JA
N17
FE
B17
MA
R17
Corporate Bonds
Change in 2016 +3,8% - +1,3% -0,5%
BANK OF RUSSIA
Issuing Activity in the External Market Remains High Due to Low FX Volatility and Decreased Expectations of Fed Tightening
24
-6,0-4,0-2,00,02,04,06,08,010,012,014,016,0
-6-4-202468
10121416
Jan 1
5
Feb
15
Ma
r 15
Apr
15
Ma
y 1
5
Jun 1
5
Jul 15
Aug 1
5
Sep 1
5
Oct 15
No
v 1
5
De
c 1
5
Jan 1
6
Feb
16
Ma
r 16
Apr
16
Ma
y 1
6
Jun 1
6
Jul 16
Aug 1
6
Sep 1
6
Oct 16
No
v 1
6
De
c 1
6
Jan 1
7
Fe
b 1
7
Ma
r 17
Apr
17
Ma
y 1
7
Jun 1
7
Jul 17
Aug 1
7
Sep 1
7
Oct 17
No
v 1
7
De
c 1
7
External Debt Placements and Redemptions ($ bln)
Eurobond placement Yeild range
Planned repayments
(right axis)
Sovereign Eurobonds Regional Eurobonds Corporate Eurobonds
2009 28,0 1,4 94,8
2010 32,2 1,3 106,6
2011 29,2 0,7 113,9
2012 34,9 0,5 148,9
2013 40,7 0,6 181,8
2014 39,3 0,5 165,9
2015 35,9 0,4 139,1
Dec.16 37,6 0,5 136,4
External Bond Market Portfolio ($ bln)
Change in 2016 +4,7% +25% -1,9%
0
117
233
350
466
583
700
0
2
4
6
8
10
12
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Eurobond Yields and CDS-spread
Corporate eurobonds Sovereign eurobonds
CDS-spread
Source: Bank of Russia
BANK OF RUSSIA
Non-residents’ Demand Increased in March Due to Good Carry Trade Conditions
25
Source: EPFR, Bank of Russia calculations
Credit rating Country/term
to maturity 2Y 5Y 10Y 15Y
3 investment grades
China -75 -60 -85 -30
South Africa -80 -41 20 18
India 14 -31 -35 -10
2 investment grades, 1 speculative
grade
Indonesia -76 -31 -15 -8
Turkey -22 -15 7 -
Bulgaria -163 -285 -323 -
1 investment grade, 2 speculative
grades Russia -5 38 100 177
3 speculative grades Hungary 66 99 132 152
9
0
5
10
15
20
25
USA
Can
ada
Jap
an
U.K
.
Fran
ce
Ital
y
Ger
man
y
Ru
ssia
Bra
zil
Sou
th A
fric
a
Ch
ina
Ind
ia
G7 BRICS
Average P/E
0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
01.15 04.15 07.15 09.15 12.15 03.16 05.16 08.16 11.16 01.17
NDF Implied Rate / Implied Volatility
0,000
0,200
0,400
0,600
-1200-1000
-800-600-400-200
0200400600800
Jan 14 Jun 14 Nov 14 Apr 15 Sep 15 Feb 16 Jul 16 Dec 16
Carry-to-risk ratio and capital flows
Capital flows on bond market (EPFR Global)
Carry-to-risk ratio