Foreign capital inflow into Russia continues in February

Despite the strengthened sanction rhetoric towards Russia, non-residents’ reaction was weak and short-lived: yields of federal government bonds (OFZs) remain generally lower than in late 2018 while the share of OFZ purchases as part of initial placement has grown returning to the values of 2018 Q1, reports the new issue of the Financial Market Risk Review.

The pace of dedollarisation of banking sector assets and liabilities is moderate and balanced. The foreign currency-denominated share of the balance sheet (with exchange rate adjustment factored in) is at its lowest level in quite some time.

As part of the global financial indicators reform, it is expected that LIBOR will no longer be used by the end of 2021. Therefore, Russian derivatives market participants are advised to amend existing contracts to employ other benchmarks.