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. Last Updated: 07/27/2016

Ruble Bonds Sell for $265M

Russia easily sold treasury bonds worth almost 7 billion rubles ($264.3 million) at an auction Wednesday, providing evidence of investors' confidence in the ruble despite falling stock and oil prices.

The Finance Ministry sold 6.95 billion rubles ($262.9 million) out of a 7 billion ruble offering of the 2021 bonds, setting the yield at 6.53 percent, one basis point below the market.

"While stock markets and Eurobonds are not doing very well due to a lower oil price, there is still a strong demand for ruble instruments, especially for long paper," said Pavel Pikulev, fixed-income analyst at Trust Bank in Moscow.

Pikulev said demand for the bond was supported by abundant liquidity, which had hit record levels at the end of 2006 due to an increased budget spending and lavish year-end bonus payments ahead of the New Year holidays.

The Central Bank said the offering was oversubscribed with investors' demand at around 10 billion rubles ($377.6 million).

Encouraged by the auction's success, the Finance Ministry announced plans to auction treasury bonds worth 22 billion rubles ($830.8 million) later this month, as it tries to take advantage of favorable liquidity situation and low interest rates.

"We plan to borrow more in the first half of the year because we will have fewer problems with liquidity this way," said Alexander Shcherbakov, deputy head of the domestic debt department at the Ministry.