Russian Ministry of Finance is not afraid of Moody’s downgrade of Russia's sovereign rating to 'junk'

The Ministry of Finance didn’t cancel today's auction of federal loan bonds, despite the fact that the Saturday reduction of Russia country rating by Moody's spoiled the mood of investors. Experts believe that the downgrade was expected, and the sale of federal loan bonds in the current environment can be only provoked by a new series of sanctions.

Today the Ministry of Finance will hold a planned auction of federal loan bonds and will offer investors bonds for 10 billion rubles maturing in five years at a floating rate. The Ministry has taken this decision, despite the fact that the international agency Moody's reduced the country Russia's rating to a speculative grade on the night of February 21. The agency S&P was the first that did it, and Russia now has a "junk" rating from the two international agencies.

In such circumstances, we shouldn’t rely on demand from foreign investors. "Previously the serious demand at auctions was provided by foreign investors who believed in the strengthening of the ruble, but recently their desire to buy our government bonds decreased, and Moody's decision to lower the rating of the country will play a role in this process," - says head of analytical department of Rus-Rating Alexander Ovchinnikov.