Russia may increase its foreign borrowing next year to $7 billion, but the decision will have to be taken carefully to avoid inflationary risks, Finance Minister Anton Siluanov said on Friday.
Siluanov’s remarks follow the ministry’s successful placement of a $1.25 billion Eurobond top-up on Thursday at a yield of 3.99 per cent, lower than it was in 2013, before sanctions on Russia over its actions in Ukraine limited its access to foreign markets.
Watch what else is making news
“Next year, we may come back to the foreign borrowing volumes achieved in previous years – about $7 billion,” Siluanov told a briefing on the sidelines of the Moscow Finance Forum. Russia last borrowed that much in 2013.
“We see that such volumes are readily available to us. The only thing is … we have to coordinate our plans with the central bank to make sure that those inflows do not seriously influence the strengthening (of the rouble), so that they don’t affect our assessment of the balance of payments.”
Siluanov also said that the ministry may raise issuance of domestic debt by 100 billion roubles ($1.58 billion) this year, which would bring the total to more than 1 trillion roubles.
The ministry also plans to place this year, as a test, some 30 billion worth of treasuries that would be sold directly to the Russian population.
With privatisation proceeds threatening to fall short this year, the ministry is seeking ways to diversify its methods of financing the budget deficit, expected to reach 3.2 to 3.3 percent of gross domestic product this year.