Bloomberg: Nabiullina to issue OBRs to help economy

Bank of Russia Governor Elvira Nabiullina announced the plan to resume sales of short-term bills, known as OBRs, just as policy makers renew a cycle of interest-rate cuts that are themselves inflationary.

According to Bloomberg, the very bonds that helped Russia’s central bank curb price growth during the oil boom may now be its best weapon against inflation fueled by spending to soften a recession.

“The Finance Ministry running a deficit is creating problems for the central bank. That’s why they have to mop up liquidity,” a senior emerging-markets economist at Barclays Plc, Daniel Hewitt, said.

Nabiullina said she will sell “tens of billions of rubles” of the bills in a pilot program over the next two to three months on the same day the central bank lowered benchmark borrowing costs for the first time in almost a year.

The last time the OBRs were issued in 2011.