MediumIV Macro Policy & Sovereign Debt30 September 2026, Wednesday · 14:01 TRT (UTC+3)
Russian Finance Ministry finds no buyers at acceptable prices for bond auction
On 30 September Russia's Finance Ministry cancelled a 96.5 billion rouble OFZ auction because no bids came in at acceptable prices. It was the second failed auction of 2026. The ministry completed 92.7% of its third-quarter borrowing plan in nominal terms.
According to an Interfax report at 14.01 on 30 September, the cancelled issue was OFZ 26228, maturing on 10 April 2030 with an annual coupon of 7.65%. OFZs are federal government bonds issued in roubles by Russia's Finance Ministry; this series was due to be redeemed in 2030. The Moscow Times' Russian service put the amount on offer at 96.5 billion roubles. The previous cancellation, on 15 July, was made on the same grounds.
Two sources give different measures of third-quarter performance. The Moscow Times' Russian service wrote that 1.39 trillion roubles had been raised at nominal value, completing 92.7% of the 1.50 trillion plan. Interfax and The Moscow Times' English service, by contrast, cited 1.264 trillion roubles based on sales proceeds; Interfax put this at about 84% of the plan. The gap of roughly 126 billion roubles may reflect bonds being sold below nominal value; the sources did not confirm this reading.
According to The Moscow Times' English service, the 2026 budget deficit forecast has been raised from 3.6 trillion to 7.3 trillion roubles. The ministry plans to sell 7.7 trillion roubles of bonds in 2027. The same report said yields on long-dated government debt were approaching 17%. Total issuance over nine months reached 4.64 trillion roubles against an annual target of 5.50 trillion.
Talay assessment
Bottom line
An auction with no buyers suggests Russia's domestic debt market will struggle to absorb the 7.7 trillion roubles of issuance planned for 2027. The deficit forecast rising from 3.6 trillion to 7.3 trillion roubles, and yields on extended-maturity debt nearing 17%, show that investors are demanding higher returns. In 2027 the ministry will either borrow at greater cost or push back its borrowing schedule.
Likely effects
- Russian public financesNegative1–6 months
Weaker investor demand raises the cost of financing a 7.3 trillion rouble deficit and increases the share of interest payments in the budget.
- Russian banking systemNegative1–6 months
Covering the deficit through bond issuance could load more government paper onto bank balance sheets and squeeze room for private-sector lending.
- War financingUncertain6 months+
Borrowing difficulties expose the fragility of a plan that relies on new taxes and domestic debt to fund defence spending in 2027.
Possibilities, ranked
- 1Costlier borrowing50%
The ministry accepts higher yields at its October auctions to keep selling, and borrowing costs rise.
Watch: Average yields and bid volumes at October auctions
- 2Further cancellations30%
Extended-maturity issues find no buyers, and the ministry shrinks or delays its fourth-quarter plan.
Watch: The Finance Ministry's fourth-quarter issuance programme
- 3Demand recovers20%
As rate expectations shift, banks step up demand and later auctions approach planned volumes.
Watch: The OFZ price index moving away from its summer lows
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Cancelled auction amount▼ 96.5 billion roubles
- Q3 plan completion (nominal)▼ 92.7%
- 2026 deficit forecast▼ 7.3 trillion roubles
- Planned 2027 bond sales▼ 7.7 trillion roubles