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. Last Updated: 07/27/2016

Treasury Bills Fetch Higher Price

Foreign exchange market stability, an excess of rubles and a possible cut in the refinancing rate prompted investors in GKO treasury bills to pay a high price at Wednesday's sale, dealers said.

The 119-day GKO yielded 16.28 percent at the auction, surpassing the Finance Ministry's most optimistic expectations of 17 percent to 19 percent.

"Two days ago there was hope that the dollar will rise. Yesterday it disappeared, and money flowed into the GKO market," Aljba-Alliance dealer Mikhail Vasilyev said.

International Moscow Bank dealer Yevgeny Krayev said the high price at the auction contributed to a price rise in short-term OFZ bonds on the secondary market.

"On the whole, the market is rising on positive expectations, dollar stability [against the ruble] and a possible cut in the refinancing rate."

The Central Bank has said it will consider lowering its key refinancing rate, now at 33 percent, at the start of June. Dealers said the price rise on the secondary market would last for another day after which a correction would start.

"Since prices are going up, there is some volatility on the market, which may lead to foreigners wishing to sell some of their portfolios," Krayev said.