Non-residents continue to build up investment in OFZs in January
In January 2020, despite investors’ sluggish interest in EME assets amid the spread of the coronavirus, the portion of non-residents’ investment in OFZs in the accounts of foreign depositories in the NSD grew by 1.8 pp, to 33.2% on 31 January, according to the latest issue of the Financial Market Risk Review. At the close of month, the OFZ yield curve did not exceed the levels of the start of the year.
Corporate lending by banks at floating interest rates is becoming increasingly wide-spread, which helps to lessen the vulnerability of the banking sector towards interest rate risk. Such loans are provided on average for longer periods of time, which improves the availability of long money in the economy. The Bank of Russia key rate is most often used as the floating interest rate, and as a result banks have to closely assess the underlying risk.
The Bank of Russia has continued to assess the efficiency of macroprudential measures after the introduction of the debt to income (DTI) indicator both for banks and for microfinance organisations (MFOs). In December 2019, the portion of banks’ loans issued to borrowers with DTI over 80% totalled 23.3%. The first study of the DTI of MFOs’ borrowers demonstrated that more than half of new microloans (53.7%) were issued to borrowers whose DTI exceeded 50%, and 36.9% of microloans went to borrowers with DTI over 80%.