Russian finance minister confident 2024 state borrowing plan will be fulfilled

MOSCOW. Dec 4 (Interfax) - Russia's domestic borrowing plan for the current year will be fulfilled, Finance Minister Anton Siluanov said.

"We have no doubts about meeting our plans; all plans will be fulfilled," he said in an interview with the RBK television channel.

In the interview, which was recorded before the scheduled auctions for OFZ federal bonds on Wednesday, Siluanov said he expected the successful placement of a new type of floating rate bond in the record amount of 1 trillion rubles. "[It will be] 1 trillion rubles today. We hope there will be demand; we have created an interesting bond after consulting with investors. We see the corresponding demand for it, and today we will see the result," he said.

In the current conditions, floating rate bonds are the most interesting instrument for both the Finance Ministry and investors, Siluanov said.

"Why for us? Because we are all expecting inflation to decrease, we are all expecting monetary policy to loosen in the coming years, so the cost of these bonds for the budget will decrease. And for investors, floating rate bonds also protect against changes in the cost of money on the market, so they are a good investment for them as well. I think we have found each other," he said.

Speaking about the prospects for easing monetary policy, Siluanov said the prerequisites for this will hopefully emerge as early as in the first quarter of 2025.

"We need to exactly catch the point when we see a cooling from the increase in the cost of money and the high rate. When this cooling reaches the limit, then we need to loosen the reins, need to already stop the tightening of monetary policy, end the severity of our monetary policy and we need to stop somewhere, catch this moment. I think next year is that time," he said.

"We're now monitoring. We see that the dynamic is already decreasing for corporate lending along with consumer lending. These are already signals that there is an effect from the decisions that the Central Bank and government made," Siluanov said, adding that he hopes it will be possible to "catch" the necessary level of cooling in the first half of the year and slightly ease monetary policy.

At the auction on Wednesday, the entire new issue of floating rate bonds series OFZ-PK 29025 maturing on September 4, 2028 was placed. Bonds worth a total of 1 trillion rubles were sold at face value, with demand reaching 1.589 trillion rubles at face value. Revenue from the auction amounted to 935.76 billion rubles. A new historical record was thus set for the placement of government bonds in a single auction.

Combined with the other auction held the same day, the Finance Ministry placed OFZ bonds totaling 1.028 trillion rubles on December 4, compared to 113 billion rubles in all of October and about 125 billion rubles in November. In order to meet its borrowing target of 2.4 trillion rubles for the quarter, the ministry must place about another 1.1 trillion rubles worth of OFZ bonds on the remaining three auction days of this year.