MOSCOW Feb 4 Russia's finance ministry cancelled its weekly domestic bond auctions for the second week in a row on Tuesday, saying in a statement the decision was "based on an analysis of current market conditions".
Yields on so-called OFZ bonds have risen by 70-80 basis points since the start of the year. A new ministry sale could have potentially pushed the rates higher, analysts said.
Emerging markets such as Russia have been hit hard this year by outflows from investors following the U.S. Federal Reserve's tapering of its monetary stimulus.
The Russian finance ministry has cancelled auctions before, waiting until market conditions improve. Russia, which envisages a budget deficit of only 0.5 percent of gross domestic product this year, is under no great pressure to borrow.
"Given the fact that the (rouble) weakening will provide additional revenues to the federal budget, the finance ministry can flexibly control the amount of borrowing and completely stop placement, if it deems rates unacceptable in real terms," said Alexei Tretyakov, head of Arikapital investment company in Moscow.