Rates Weekly - September 15, 2021. O/N Rates to Remain Stable; Another No-Limit OFZ Auction Tomorrow

> Ruble liquidity: Overnight rates to remain stable slightly below the key rate. No large liquidity flows are expected in the coming week, and the liquidity situation looks to be balanced. We think the structural liquidity surplus will remain rather low at R0.8 trln. Against this backdrop, O/N interbank lending rates should remain slightly below the key rate at 6.70%.> OFZs and rates: Finance Ministry to hold another no-limit auction. The Finance Ministry has opted to continue auctioning off fixed-coupon issues without set volume limits. Tomorrow, it will offer up the 10y OFZ 26239 (July 2031) and 20y OFZ 26238 (May 2041). It is interesting that the 10y issue was selected instead of the 8y issue, as it has been longer since the latter was on offer. It seems that the Finance Ministry may be aiming to get the 10y issue to its R500 bln volume cap more quickly. The issue already has R280 bln outstanding, more than any of the other "new" issues. With that in mind, it looks like the premium of the 10y issue to the "old" curve will shrink faster than the premiums on the other new issues. We do not expect significant premiums to be offered at tomorrow's auction, as the Finance Ministry does not have too much left to borrow this year. We still expect at least R50 bln to be placed, based on how much demand the "new" issues have been seeing in the secondary market.