The Central Bank of Russia published its Review of Russian Financial Instruments, describing how expectations of prolonged tight monetary conditions supported further growth of the floating-rate corporate bond market in 2024 and made floating-rate bonds the government’s main funding instrument. The review also notes a shift of foreign exchange trading towards over-the-counter venues after sanctions against Moscow Exchange, rapid expansion of the digital financial asset market, and uneven IPO activity across the year. Most floating-rate corporate bonds were issued by high credit rating issuers and their maturities shortened. Floating-rate government bonds accounted for more than half of government offerings; individuals and non-governmental pension funds increased purchases, while overall market liquidity declined. In the FX market, the over-the-counter segment’s share rose from 49% to 70% following the sanctions. The digital financial asset market’s volume increased ninefold, dominated by ruble-denominated, debt-based fixed-income DFAs with maturities of up to one year. IPOs rose in 2024 H1 but issuers adopted a wait-and-see stance in 2024 H2; individual participation increased, although institutional investors bought most of the shares offered.
Central Bank of Russia 2025-03-12
Central Bank of Russia review highlights 2024 surge in floating-rate bond issuance and ninefold growth in digital financial assets
The Central Bank of Russia's Review highlights the 2024 growth of the floating-rate corporate bond market, driven by expectations of prolonged tight monetary conditions. It notes a shift in foreign exchange trading to over-the-counter venues due to sanctions against Moscow Exchange, a ninefold increase in the digital financial asset market, and uneven IPO activity. Floating-rate government bonds became the main funding instrument, with increased purchases by individuals and non-governmental pension funds, while overall market liquidity declined.