Russian Citizens Set Historic Record for OFZ Purchases in April
Individuals purchased federal loan bonds worth 80 billion rubles on the secondary market, an absolute record, amid a decline in the share of large banks at auctions.
Analytical Note
Topic: Record demand for OFZs from the public — flight from risk or a sound strategy?
Date: May 13, 2026
Author: Independent Analyst
The Gist: What's Really Happening
Individuals purchased OFZs worth 80 billion rubles on the secondary market in April — an absolute historical record. At first glance, the picture is rosy: citizens have taken a liking to the stock market, are channeling savings into government bonds, and supporting the budget. But the actual mechanics of the process are fundamentally different. We are witnessing not a surge in financial literacy, but a massive flight of retail investors from equities into fixed-income instruments. People are not so much buying OFZs as they are selling risks, and this is fundamentally changing the market structure.
The key non-obvious insight: individuals became the main buyers on the secondary market precisely when systemically important banks sharply reduced their presence there. SIBs cut their secondary market sales to 129 billion rubles in April from 266 billion in March — a more than twofold decline. At the same time, the share of SIBs at primary auction placements fell to 36.3% from 37.8% a month earlier. Banks have ceased to be a buffer between the Ministry of Finance and the public. Previously, the scheme worked like this: banks bought large volumes at auctions and then gradually sold them to retail on the secondary market. Now retail is entering the secondary market directly and buying up securities from the same banks that are reducing their positions. This means the OFZ market is losing a professional intermediary that took on liquidity risk. In the event of any external shock, retail investors may panic — and then the secondary market will grind to a halt.
Timeline and Context
The story began with the April meeting of the Central Bank of the Russian Federation, where the key rate was cut by 50 basis points to 14.5%. The decision matched the consensus forecast, but the regulator's signal turned out to be unexpectedly hawkish. The Central Bank raised its forecast for the average key rate in 2026 to 14–14.5%, and for 2027 to 8–10%, making it clear that the easing cycle would be slow. The market reacted with a decline in the RGBI index, which fell back below 120 points.
Against this backdrop, OFZ yields remained attractive: medium- and long-term issues offered 14.6–14.7% per annum, higher than deposit rates and the RUONIA level (14.2–14.4%). The public felt this instantly. In January-February, retail demand for OFZs was moderate: the market was waiting for a rate cut but feared inflationary pressure. By April, it became clear: there would be no rapid easing, so current yields were a window of opportunity that would not close soon.
Meanwhile, the Ministry of Finance accelerated borrowing. In April, the ministry placed OFZs worth 840 billion rubles, fulfilling 62.7% of the quarterly plan. This was a record monthly volume. Finance Minister Anton Siluanov publicly stated that the market "perceives placements quite well" and hinted at a possible adjustment to the borrowing plan, but "not a significant one." The state is actively borrowing, and the private investor is becoming a key creditor.
Who Wins and Who Loses
Winners:
The Ministry of Finance of the Russian Federation — undoubtedly. The ministry gains a stable channel for funding the budget deficit, independent of demand from large banks. With current oil prices (above $100 per barrel) and record placements, the budget structure looks sustainable. Moreover, the shift in demand towards individuals reduces the Ministry's dependence on institutional investors and their risk premium demands.
Private investors who entered long OFZs in April are also in profit. If inflation continues to slow and the Central Bank continues to cut rates (albeit slowly), the price of long-dated bonds will rise. A conservative scenario assumes total returns on long OFZs of 18–23% per annum in 2026, a baseline scenario of 23–26%, and an optimistic scenario of up to 30–36%.
Losers:
The stock market. Record demand for OFZs mirrors a flight from equities. Retail investors saw that stocks were not delivering confident growth and shifted into instruments with guaranteed returns. This creates a vicious cycle: the more money flows into OFZs, the less liquidity remains in the stock market, the weaker the growth, and the more attractive bonds appear.
Systemically important banks are also losing influence. Their share in primary auction placements is declining, and their role as market makers on the secondary market is shrinking. This reduces their interest income from government bond operations and limits their ability to manage their balance sheets.
What the Media Isn't Saying
First: Record demand from the public is not solely a voluntary choice. A significant portion of OFZ purchases by individuals occurs through trust management and bank investment products. NFOs under trust management increased net OFZ purchases to 41.6 billion rubles in April from 38.7 billion in March. Banks are actively selling clients fixed-income strategies based on OFZs. Citizens do not always consciously choose a specific issue — often they simply buy a product marketed as a "high-yield deposit with capital protection."
Second: The structure of the secondary market is becoming dangerously asymmetric. The average daily trading volume on the secondary OFZ market fell in April to 51.5 billion rubles from 61 billion in March. This means liquidity is declining precisely when retail is increasing positions. In the event of an external shock (e.g., a sharp drop in oil or a new wave of geopolitical tension), banks will not be able to quickly absorb sales from the public — volumes simply won't be enough. This is a recipe for downward price gaps.
Third: The Ministry of Finance is primarily placing fixed-coupon bonds but is ready to use floaters as well. Siluanov stated this directly at the Exchange Forum. If inflation does not slow, the Ministry will shift to issuing OFZs with floating coupons linked to RUONIA. This will protect the budget from interest rate risk but will hit holders of long fixed-coupon OFZs: their bonds will become less attractive relative to new floaters.
Fourth (the main non-obvious insight): The record demand from the public is a consequence of the ruble's weakening. In April, the ruble exchange rate against the dollar fell by 7.9%, and against the yuan by 6.7%. The weakening of the national currency fuels inflation expectations and creates an additional incentive to purchase fixed-income instruments as a way to protect savings from depreciation. The paradox is that people are buying ruble-denominated OFZs to hedge against the ruble's fall — although formally this is not a currency hedge. Psychologically, it works: when deposit rates fall in line with the key rate and the currency weakens, a 14.5% yield on OFZs seems an attractive alternative.
Forecast: Next 30 Days and 90 Days
30 days (until mid-June 2026):
The growth in demand from the public will continue, but at a slower pace. The key factor is the May Central Bank meeting. The regulator gave a hawkish signal in April, and the market is pricing in a high probability of a pause in rate cuts. Analysts at PSB warn: "May could be a weak month for OFZs." The RGBI index risks consolidating near 119 points without significant growth. Yields will remain in the range of 14.5–15% for long-dated issues. Individuals will continue buying, but April's volumes (80 billion rubles) are unlikely to be repeated. I expect net purchases in the range of 50–60 billion rubles in May.
The Ministry of Finance will continue placements but may slow the pace after a record April. The share of SIBs at auctions will likely stabilize around 35–37%. Other banks and NFOs will continue to increase their share, replacing large players.
90 days (until mid-August 2026):
A turning point arrives. The key fork relates to inflation and geopolitics. If geopolitical tensions ease and inflation continues to slow, the Central Bank may resume the rate-cutting cycle. In this scenario, OFZ yields will decline, and long-dated bond prices will rise. Total returns on long issues in 2026 could reach 23–26%. Individuals who entered in April-May will be in profit — and the record demand will retrospectively appear as a sound strategy.
Negative scenario: geopolitical situation worsens, oil falls, the budget comes under pressure. The Ministry of Finance is forced to accelerate borrowing and switch to floaters. This will create a supply overhang in the OFZ market and hit holders of long fixed-coupon bonds. Retail investors, lacking experience in managing interest rate risk, may panic and start dumping positions — and liquidity on the secondary market, as we recall, is decreasing. This could lead to a sharp price drop of 5–7% over several days.
Non-obvious final forecast: We are witnessing a structural shift in the OFZ market that will have long-term consequences. The retail investor is becoming a systemically important creditor to the state. This makes the market less professional but more resilient to speculative attacks — individuals are less likely to short than banks. However, the price of this resilience is increased vulnerability to panic during external shocks. The state gains a reliable funding channel but takes on the risk of a sudden halt in demand from the public if the macroeconomic situation deteriorates sharply. For now, this scenario seems unlikely given current oil prices. But if oil falls below $70 per barrel, the entire structure will face a serious test.
— Editorial Team
