(Adds context, details)
MOSCOW Feb 19 The Russian finance ministry said
on Wednesday it cancelled its weekly auction of OFZ treasury
bonds due to lack of demand, underscoring a turn for the worse
on Russia's volatile financial markets.
The ministry said orders were insufficient at "the prices
adequately reflecting the credit quality of the issued bonds".
It had been planning to sell up to 20 billion roubles ($561
million) in two separate auctions of bonds maturing in 2020 and
On the secondary market, Russia's 2028 OFZ treasury bond
was yielding 8.51 percent on Wednesday.
The last-minute annulment of the auction came as Russia's
financial markets fell, with concerns about the violent
political crisis in neighbouring Ukraine adding to poor
The rouble hit a record lows against the euro and its
dollar-euro currency basket, after the finance ministry
announced on Tuesday it would be buying $100 million in foreign
currency each trading session to replenish its Reserve Fund
until the end of May, in effect reducing central bank
interventions to support the rouble.
Russian share indexes were also lower.
On Tuesday, the central bank said the U.S. Federal Reserve's
policy of reducing its monetary stimulus was negative for
Russian borrowers, and could end up raising yields on Russia's
long-term OFZ treasury bonds by 1.2-1.7 percentage points.
(Reporting by Elena Orekhova, writing by Jason Bush; Editing by
Elizabeth Piper and John Stonestreet)