Russia raised nearly one trillion rubles amid budget problems
The Russian Ministry of Finance raised nearly 939 billion rubles in a single day through the sale of government bonds. The nominal value of the offering was 1 trillion rubles—the largest single issuance of OFZs since November 2025.
These are floating-rate federal bonds (OFZ-PK) of series 29031, maturing in July 2042. The Russian Ministry of Finance sold the entire amount of bonds offered.
Investor demand exceeded supply by a factor of 1.4 and totaled approximately 1.424 trillion rubles. However, since the bonds were sold below par, the actual proceeds from the auction amounted to 938.87 billion rubles.
The auction marked the first major placement of OFZs following a hiatus that lasted about a month and a half. No previous auctions of government bonds had been held, in part due to the high cost of borrowing for the Russian budget.
The need to raise funds is exacerbated by problems with the Russian Federation’s federal budget. In the first seven months of 2026, the deficit reached 6.455 trillion rubles, which is nearly double the full-year target of 3.786 trillion rubles.
One of the reasons for the deterioration of the situation was lower oil and gas revenues. From January through July, they fell by 16.8% year-over-year. At the same time, Russian budget expenditures are growing faster than revenues.
The high cost of government borrowing also remains a problem for Moscow. The yield on 10-year OFZ bonds stood at around 16% per annum in August, which is why the Ministry of Finance had previously been in no hurry to return to the market.
Now, however, the Russian government is forced to make more active use of the domestic debt market to finance its budgetary needs. The record-breaking placement of OFZs has become a way for the Russian Ministry of Finance to quickly raise a significant amount of funds amid a growing budget deficit and declining oil and gas revenues.
The Russian Federation’s budget deficit has risen sharply due to a surge in government spending.
As a reminder, consumer sentiment in Russia is rapidly deteriorating, confidence in the economy is declining, and anxiety is mounting over a possible new wave of mobilization. This is reported by the Foreign Intelligence Service of Ukraine.
After three years of unexpected economic growth, Russia is facing a sudden slowdown—war expenses, inflation, and falling oil prices have begun to weigh on an economy that, until recently, seemed resilient to sanctions.
Consumer lending in Russia has fallen to a six-year low.
