06/20/2019. E.Gavrilenkov and A.Kudrin: OFZ: Supportive Combination
The recent CBR decision to cut the key interest rate and its generally dovish comments about the future direction of the monetary policy may support demand for OFZ from international players. If we take into account the high chances for the further contraction of the US interest rates in the near future, then the inflow of foreign money may easily beat the regulator's relatively moderate expectations. Simultaneously, start of the rate cut cycle is likely to bring down the cost of funding for commercial banks, which will also be supportive for ruble bonds. In general, the OFZ yield curve still has potential for compression which can materialize within next several months.