MOSCOW, August 9. /TASS/. Russian banks will be able to buy out new Eurobonds of the Finance Ministry in the absence of demand from US investors, the Bank of Russia said.
"In late July, discussions about sanctions against Russia intensified, and on August 1 restrictions were placed on the possibility of US investors’ participation in the initial placement of sovereign bonds in foreign currency. This ban is not significant for the market of the government’s Eurobonds, as Russian banks have a large reserve of foreign currency liquidity and they will be able to buy out new Eurobonds if the Finance Ministry decides to enter the Eurobonds market," the Bank of Russia noted.
According to the Bank of Russia, in the first half of 2019, the banks significantly increased the amount of funds deposited in accounts with non-resident banks, which led to an increase in net foreign assets of the banking sector.
"As a result of the increase in the most liquid part of foreign assets, banks formed a reserve of foreign currency liquidity ($18 billion), which can be used in case of increased volatility in the financial markets," the regulator added.
About US sanctions
On August 2, it became known that US President Donald Trump signed a decree imposing a second package of sanctions against Russia in connection with the Skripal case. In particular, it bans American financial institutions from participating in the initial offering of Russian sovereign Eurobonds and providing non-ruble loans to the Russian government.
The US will also oppose the provision of loans, financial or technical assistance to Moscow by international financial institutions such as the World Bank or the International Monetary Fund. The second package of sanctions will enter into force on August 19 and will be valid for at least one year.