OFZ (abbreviation for russian: Облигации Федерального Займа, Obligatsyi Federal'novo Zaima, Federal Loan Obligations) are coupon-bearing federal loan bonds issued by the Russian government. The
Ministry of Finance A ministry of finance is a part of the government in most countries that is responsible for matters related to the finance.
Lists of current ministries of finance
Named "Ministry"
* Ministry of Finance (Afghanistan)
* Ministry of Finance and Eco ...
auctions off OFZs to finance the federal budget, or less commonly, to bail out troubled banks.
Given their role, they form an essential part of the Russian financial system.
OFZs were introduced in June 1995 to complement the
GKO
GKO (abbreviation for russian: Государственное Краткосрочное Обязательство, Gosudarstvennoye Kratkosrochnoye Obyazatyelstvo, Government Short-Term Commitments) are short-term zero-coupon government bonds i ...
market as an instrument with medium and long-term standing.
Inflation-linked OFZ bonds are also issued. In August 1998, the Russian government defaulted on domestically issued debt, including OFZs.
In 2012, OFZs were connected to the pan-Europe settlement and clearing system
Euroclear
Euroclear is a Belgium-based financial services company that specializes in the settlement of securities transactions, as well as the safekeeping and asset servicing of these securities. It was founded in 1968 as part of J.P. Morgan & Co. to settl ...
.
The share of foreign-held OFZs increased from nearly zero in 2006 to 25% by the end of 2013.
As of February 2018, 33.9% of all outstanding OFZs were held by foreigners. By September 2018 the number had dropped to 27%, due to the threat of further US sanctions against the Russian economy.
In February 2022, ING reported that the share of OFZs held by non-Russians has dropped to about 18%, as a result of the Russian recognition of Donetsk and Luhansk People's Republics.
See also
*
GKO
GKO (abbreviation for russian: Государственное Краткосрочное Обязательство, Gosudarstvennoye Kratkosrochnoye Obyazatyelstvo, Government Short-Term Commitments) are short-term zero-coupon government bonds i ...
*
National Settlement Depository
The National Settlement Depository (NSD), headquartered in Moscow, is a Russian non-bank financial institution and central securities depository (CSD). It provides depository, settlement (bank account), and related services to financial market enti ...
References
External links
Current volume of GKO-OFZ marketat the
Bank of Russia
The Central Bank of the Russian Federation (CBR; ), doing business as the Bank of Russia (russian: Банк России}), is the central bank of the Russian Federation. The bank was established on July 13, 1990. The predecessor of the bank can ...
website (in English)
Economy of Russia
Government bonds
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