On August 18 trading, the RGBI index of Russian government bonds hit a monthly low, falling to 113.27 points. The decline in the Russian sovereign debt market follows a new wave of Ukrainian drone strikes on oil refineries. This was reported by UkrRudProm, according to the portal PromPolitInform.
Financial market participants in the Russian Federation have recorded a decline for the third consecutive day. The yield on long-term bonds, which the aggressor state’s government uses to cover budget deficits, has again approached the 16% annual rate.
The impact of the fuel crisis on the Russian economy
Analysts link the negative trend to concerns regarding another escalation of the fuel crisis. Due to UAV attacks on four refineries since the beginning of August, at least ten regions of Russia have imposed restrictions on fuel sales at gas stations.
Gadra Capital strategist Alexander Bakhtin noted that investors are questioning whether the Central Bank of the Russian Federation can begin a cycle of key rate cuts. Supply disruptions for gasoline and diesel are fueling inflationary risks, forcing the regulator to act more cautiously.
Stock market decline
The drop in bond prices is accompanied by a decline in stock indices. Finam analyst Dmitry Lozovoy emphasized that the MOEX index is showing its worst performance since September 2022.
According to the expert, market players are pricing in the likelihood of further escalation and increased financial losses from strikes on industrial infrastructure. On Monday, the MOEX index fell by an additional 2%.
Illustrative photo: Ministry of Science and Technology / GODL-India
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