MOSCOW: Russia's Finance Ministry on Wednesday raised its domestic borrowing plan for the second quarter to 270 billion roubles ($4 billion) following strong bids at government bond auctions over the past few weeks.
Konstantin Vyshkovsky, director of the ministry's debt department, told Reuters the Finance Ministry had raised the plan from 250 billion roubles in the first quarter due to "persistent demand" for Russian bonds.
He said demand was stimulated by excessive liquidity in the Russian banking system as well as a stabilisation in oil prices and the rouble. Russia is trying to plug budget holes as weak oil prices drive a deficit. The economy is likely to contract again in 2016 following a 3.7 percent decline last year.
On top of the 270 billion roubles it plans to borrow domestically in the second quarter, the Finance Ministry could also sell inflation-linked OFZ government bonds to borrow more.
It first held a debut issue of inflation-linked OFZs in 2015. On Wednesday, the ministry sold 22.8 billion roubles of OFZs at three auctions, out of the 26.9 billion roubles on offer.
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