12-06-2014, 10:19 AM
Russia's benchmark 10-year domestic ruble bond rose 14 basis points to 10.9 percent during Wednesday. Meanwhile the cost of insuring Russia's five year debt against default—a measure of perceived risk in a country—hit a five-year high of 354.4 basis points, according to data provided by Thomson Reuters. This means that investors with $10 million of Russian debt would have to pay $354,400 a year to protect it.
Russia recession worries hit the bond markets
The Russian ruble has already been hit hard, and has fallen a staggering 60 percent against the U.S. dollar since the start of 2014.
Russia recession worries hit the bond markets
Russia had $524 billion in reserves just 10 months earlier. That $69 billion depletion demands that you weigh Fact 1’s significance with skepticism. In just five months during the global financial crisis of 2008-2009, Russia suffered $210 billion in reserve outflows. Indeed, the country has an almost unbroken history of capital flight – its wealthier citizens have always spirited their money offshore – and there’s plenty about the current environment that could cause that trend to pick up.
How Russia’s Debt and Currency Markets Could Spiral into Crisis - MoneyBeat - WSJ
But for a wider, more conservative group of institutional investors, the whole Ukraine episode, revealing Mr. Putin’s willingness to jeopardize the economy for the sake of a geopolitical power grab, has cemented a view that “Russia is just uninvestable,” Mr. Ash says.
How Russia’s Debt and Currency Markets Could Spiral into Crisis - MoneyBeat - WSJ
The risk that Russia will seek early repayment of a $3 billion bond is adding to pressure on Ukraine as it races to secure more International Monetary Fund loans.
Putin Bailout Haunts Ukraine With Early Repayment Clause - Bloomberg
Inflation in Russia stands around 8 percent and looks set to increase with the economy ministry eyeing 9 percent before the year is out. The Russian central bank has hiked interest rates throughout the year and the key rate stands at 9.5 percent
As ruble tumbles, what will Putin do next?
On Tuesday, the Russian economy ministry forecast net capital outflows at $125 billion in 2014.