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second half of the year If the US takes measures to limit operations with Russian debt through the Office of Foreign Assets Control (OFAC), Russia is ready, it has its own “anti-OFAC,” Kolychev added. The Treasury is flexible in assessing demand, and when it is low on long-term issues due to market stress, “we can switch to short-term floating-rate securities or <...> limit emissions, [in order] not to put pressure on the secondary market.” The Ministry of Finance may reduce the offer of OFZs in the second half of the year, because it has already exceeded the plan to attract them in the first half, said Konstantin Vyshkovsky, the head of the ministry’s debt department, on May 21. This year it exceeded the plans for attracting for Q1 and Q2, and the increased plan for Q2 (600 billion rubles) was exceeded by mid-May.
6.2 Debt
Russian external debt $bn
4Q 2016
1Q 2017
2Q 2017
3Q 2017
4Q 2017
1Q 2018
2Q 2018
3Q 2018
4Q 2018
518.7
529.7
529.6
537.5
529.1
524.9
485.5
470.2
453.7
source: MinFin
Russian foreign debt increased slightly in the first quarter. The debt increase mainly concerned government debt to foreigners. Russia's foreign debt, which is mainly held by companies, banks and the state, remains significantly below the 2014 peak.
In mid-2014, the debt was about $733bn, but at the end of March 2019 it was about $468bn. Since the peak of 2014, both sanctions and weak economic development in Russia have reduced foreign debt largely due to debt repayments. The weak economic situation reduced Russia's foreign debt also in the context of the 2009 financial crisis, but then the debt level quickly recovered after the crisis broke out. The impact of sanctions is reflected, in particular, in the continued decline in foreign debt of Russian banks, as Russia's largest banks, incl. Sberbank and VTB do not receive new long-term funding from the EU and US.
The volume of external debt of the Russian Federation in 2018 decreased by $64.1bn and as of January 1, 2019 amounted to $454.0bn. External liabilities reduced all institutional sectors, but the largest contribution to the reduction of external debt was made by other sectors, whose debt decreased by $31.0bn.
55 RUSSIA Country Report July 2019 www.intellinews.com