The 10 year yield curve in Russia right now is about 14.8% while France is at 3.5% and Japan 1.8% rates. France has 1% inflation, Japan 3% and Russia 8% give or take (estimates vary due to data issues). If Russia pursued a short term bond issue in the 1 year range that would be 18% and costs will only rise as they borrow more. Unlike Japan, the US, or EU nations they lack access to most capital markets right now. In summer 2022, Russian 10 year bonds were in the 8.5-9.5% range. We see some movement to combat it, but that means Russia has to be smart about spending and taxation. Oh and Oil prices are down this year by ~10USD which is only making the situation worse.
Deficit 3.5% - isn’t it lower than that of France, Japan or US?
The 10 year yield curve in Russia right now is about 14.8% while France is at 3.5% and Japan 1.8% rates. France has 1% inflation, Japan 3% and Russia 8% give or take (estimates vary due to data issues). If Russia pursued a short term bond issue in the 1 year range that would be 18% and costs will only rise as they borrow more. Unlike Japan, the US, or EU nations they lack access to most capital markets right now. In summer 2022, Russian 10 year bonds were in the 8.5-9.5% range. We see some movement to combat it, but that means Russia has to be smart about spending and taxation. Oh and Oil prices are down this year by ~10USD which is only making the situation worse.
Real bond yields are something like ~8% in Russia as opposed to ~2% in America.
I wish I had such a premium over the inflation in my savings account :)
Okay, but overall 3.5% doesn’t sound seriously dangerous for Russia
They don’t have financing and the figures might be manipulated