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imposed several one-off windfall taxes and “voluntary contributions” on big business.
The ideological underpinning of the discussions was briefly addressed. Valery Fedorov, director of the Russian Public Opinion Research Center (VTsIOM), presented a survey indicating that 76% of the population supports the introduction of what Putin has called, “a more equitable tax system.”
“Fairness of the tax system is a priority requirement [of the population], even much more important than balance and stability,” Fedorov explained, outlining the current ideological stance.
2.3 Companies in Russia rely largely on domestic banks for financing
The access of large Russian corporations to international financial markets is extremely limited due to financial market sanctions. No Russian firm has announced a significant new bond issue or syndicated loan since 2021. Russian companies have instead sought to pay off foreign loans and bonds as they mature – a trend highlighted by the country’s rapidly shrinking foreign debt. At the end of last year, Russia’s total foreign debt amounted to a mere 317 billion dollars, or 172 billion dollars less than at the end of 2021. Just over 60 % of foreign debt (200 billion dollars) was denominated in foreign currencies. Corporate sector forex-denominated debt, in particular, has declined – and the pace of debt repayment shows no sign of slowing this year. As of end-March 2024, Russian foreign debt amounted to just 304 billion dollars. The Central Bank of Russia (CBR) reports that Russia’s shrinking foreign debt reflects reductions in collateral of banks and corporate sector direct investment, as well as accelerated repayment of long-term corporate loans and bonds.
Prior to February 2022, foreign borrowing was key to the fundraising efforts of Russian export firms. As a consequence of war and sanctions, even giant resource extraction firms have had to turn to domestic financing sources. Because Russia’s equity and bond markets are fairly small, and because foreign investors, led by large institutional investors, have pulled out of Russia, the domestic banking sector has become the default financing source for most firms. Since summer 2022, the stock of domestically-issued corporate loans has grown briskly. Even with soaring interest rates, Russian banks granted about 20 % more corporate loans last year than in 2022. Some ruble loans have been used by companies to pay down foreign debt. The ratio of total corporate debt to GDP is still slightly less than the pre-invasion level.
11 RUSSIA Country Report July 2024 www.intellinews.com