Exploring the Role of Foreign Investors in Russia's Local Currency Government Bond (OFZ) Market

38 Pages Posted: 23 Mar 2017

See all articles by Yinqiu Lu

Yinqiu Lu

International Monetary Fund

Dmitry Yakovlev

Bloomberg L.P.

Date Written: February 2017

Abstract

Local currency government bonds (OFZ bonds) are an important fixed-income instrument in Russia's financial markets. In this paper, based on granular data, we explore the development of the OFZ bond market with a focus on foreign investors. As this fixed-income market has experienced a liberalization of the domestic trading and settlement infrastructure, and weathered several episodes of market stresses since the 2008-09 global financial crisis, the role of foreign investors can be observed along with these events. What we have found is that foreign investors had influenced the market before they became an important player and since then they have contributed to the development of the market while not necessarily destabilizing it in episodes of shocks.

Keywords: Europe, Bond markets, Bonds, Currencies, Russian Federation, Foreign investment, International financial markets, Supply and demand, local currency government bonds; Russia; financial market development, local currency government bonds, Russia, financial market development, Financial Markets and the Macroeconomy, General

JEL Classification: E43, E44, F30, G15

Suggested Citation

Lu, Yinqiu and Yakovlev, Dmitry, Exploring the Role of Foreign Investors in Russia's Local Currency Government Bond (OFZ) Market (February 2017). IMF Working Paper No. 17/28, Available at SSRN: https://ssrn.com/abstract=2938327

Yinqiu Lu (Contact Author)

International Monetary Fund ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Dmitry Yakovlev

Bloomberg L.P. ( email )

731 Lexington Avenue
New York, NY 10022
United States

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