World Economy

Foreigners Continue Buying Russian Bonds

Foreigners Continue Buying Russian BondsForeigners Continue Buying Russian Bonds

Foreign investors kept on buying Russian stocks and bonds in July despite tensions fuelled by another round of US sanctions against Russia, the Russian central bank said on Tuesday.

“Intensified tensions in Russia-American relations did not prevent an increase of foreign investors’ holdings in Russian stocks and bonds,” the central bank said in a regular report on liquidity, Reuters reported.

Non-residents bought a net 36 billion rubles ($601.40 million) worth of Russian treasury bonds, known as OFZs, on the Moscow exchange in July, while their net holdings in Russian stocks grew by 42 billion rubles, the central bank said.

The bank said Russian assets enjoyed foreign demand as they were undervalued compared with other emerging markets’ assets.

The ruble’s depreciation this summer also added to the attractiveness of Russian assets, the central bank said. The ruble, which lost more than 5% of its value against the dollar in June-July, came under pressure from a new round of US sanctions as well as dividends paid by Russian companies, the bank said.

The US Senate last month voted to impose fresh sanctions on Russia to punish Russia over interference in the 2016 US presidential election, expanding previous penalties imposed against Moscow over the annexation of Ukraine’s Crimea region.

Russian President Vladimir Putin, who has repeatedly denied the conclusions of US intelligence agencies that Moscow interfered in the US vote using cyber warfare methods, has threatened retaliation against the legislation.

He said the US will have to cut its diplomatic staff in Russia by 755 under new sanctions from Moscow. Putin said more than 1,000 people are currently employed at the Moscow embassy and three US consulates in Russia.


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