OFZ (abbreviation for ) are coupon-bearing federal loan bonds issued by the Russian government. The
Ministry of Finance
A ministry of finance is a ministry or other government agency in charge of government finance, fiscal policy, and financial regulation. It is headed by a finance minister, an executive or cabinet position .
A ministry of finance's portfoli ...
auctions off OFZs to finance the federal budget, or less commonly, to bail out troubled banks.
Given their role, they form an essential part of the Russian financial system.
OFZs were introduced in June 1995 to complement the
GKO market as an instrument with medium and long-term standing.
Inflation-linked OFZ bonds are also issued. In August 1998, the Russian government defaulted on domestically issued debt, including OFZs.
In 2012, OFZs were connected to the pan-Europe settlement system
Euroclear
Euroclear, or the Euroclear Group, is a Belgium-based financial market infrastructure group that specialises in the central securities depository (CSD) segment. It traces its origins to the Euro-clear System developed in 1968 by Morgan Guaranty (a ...
.
The share of foreign-held OFZs increased from nearly zero in 2006 to 25% by the end of 2013.
As of February 2018, 33.9% of all outstanding OFZs were held by foreigners. By September 2018 the number had dropped to 27%, due to the threat of further US sanctions against the Russian economy.
In February 2022, ING reported that the share of OFZs held by non-Russians has dropped to about 18%, as a result of the Russian recognition of Donetsk and Luhansk People's Republics.
See also
*
GKO
*
National Settlement Depository
The National Settlement Depository (NSD), headquartered in Moscow, is a Russian non-bank financial institution and central securities depository (CSD). It provides depository, settlement (bank account), and related services to financial market enti ...
References
External links
Current volume of GKO-OFZ marketat the
Bank of Russia website (in English)
Government bonds issued by Russia
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