First auctions after MinFin's return to primary OFZ market will be modest, big plans for 2023 - deputy minister
IZHEVSK. July 21 (Interfax) - The Russian Finance Ministry plans to offer small volumes of securities after returning to the primary OFZ market, ahead of which it will hold meetings with investors to understand their appetite for risk, Deputy Finance Minister Timur Maximov told reporters.
"There are no expectations yet. We will probably hold separate conference calls with investors after the vacation season, we will understand in principle what opportunities they have. Because I don't know whether they have licked their wounds or not, but I hope they understand at this point how much interest rate risk they are willing to take on. We will base our decisions on that. I think we should talk about some modest amounts at the outset, 10-20-30 billion rubles at the most. But these are all wild guesses, we need to talk to them, where they see these volumes, how they see them, at what level," Maximov said when asked about the ministry's expectations regarding possible investor demand for OFZ.
In 2023 "the [borrowing] program will be large, this is likely why we thought to ease back into things gradually, he said. "In any case, we will have to start doing something this year, because next year there will be increased volumes. I would pose the question that we basically have to start testing the market in the new conditions in terms of capacity, because after February the market was divided into two segments, essentially a national contour, and se we need to understand how much, at what levels the market is ready to take," Maximov said.
A decision to tap the market this year has been made within the Finance Ministry, he said. "We just wanted to have clarity on the three-year projections [ of the federal budget], because when everyone sees the program for 2023, 2024, 2025, it will already form certain expectations and a certain appetite, and the more there is, the more it will affect appetite," Maximov said.
"In principle, we are planning to enter in Q3. The question is when and with what volumes. I think that we will move gradually, slowly increasing the volume. We should start very carefully, the times are such, we have done nothing for six months, the market was essentially closed, banks themselves were revaluing their portfolios, they had no understanding of where everything was. Furthermore, we hope that inflation trends , key rate trends will also contribute to a more comfortable return to the market. These are the plans," he said.
"After the government approves the projections and submits them to the Duma, we can enter the market with some volumes, to test its capabilities. Some very limited volumes, so that the entry is gradual. Not to scare anyone with the program, we had ambitious plans this year, 80 billion rubles a week. So as not to create a scare with such volumes, we would like to make it more gradual," Maximov said.
Amendments were passed previously to shift the deadline for presenting the draft federal budget to the Parliament in 2022 from September 15 to October 1.