The yield on Russia’s 10-year OFZ bond surged to 11.65% in August, continuing its 17-month high due to concerns over fiscal imbalances and the central bank’s aggressive stance. The Russian government, reliant on bond sales to cover its budget deficit, is experiencing upward pressure on yields. Concurrently, the central bank raised its benchmark interest rate by 100 bps to 8.5%, hinting at heightened inflationary risks since Q3 2023 began, suggesting potential rate hikes in future meetings.