GKO Yields

GKO Yields

This chart shows the yields (on an annually adjusted basis) of Russian short-term, ruble-denominated bonds, called GKO's. During the mid-90s, foreign investors poured money into GKO's driving yields down from over 100% in 1995 to as low as 17.2% in early 1997. In 1998, when foreign investors realized the dire fiscal position of the Russian Federation, they started to repatriate their assets, driving the GKO yield up to new highs. This chart also shows how quickly the Russian government was able to issue new GKO's after the 1998 default, and at lower yields! Yields on these new GKO’s started at 17% and by 2004 dropped to only 2.4%, reflecting foreign investors perception of almost no risk in these bonds. In 2004, the Russian government stopped issuing GKO's because it no longer needed to borrow money (due to its large fiscal surplus).

Hunter Fortney

"Russian Monthly Interest Rates," Econ Stats, accessed May 1, 2014, http://www.econstats.com/r/rrus__m2.htm. The data originally comes from the Russian Central Bank http://www.cbr.ru/eng/statistics/print.aspx?file=credit_statistics/interest_rates_10_e.htm&pid=cdps&sid=svodProcStav.

EconStats

5/1/2014