RUSSIALINK: “Russia geared towards borrowing abroad in currencies other than USD in years to come – MinFin” – Interfax
MOSCOW. Sept 19 (Interfax) – The Russian Finance Ministry will be geared towards borrowing abroad in currencies other than the U.S. dollar in the next few years, a ministry official told reporters.
“There are questions as to what will happen with borrowing abroad. Naturally we will at first be geared towards reserve currencies outside the dollar zone. There is the euro curve, and a yuan benchmark,” the ministry said. Russia has not yet issued any yuan-denominated bonds.
The ministry said that based on discussions with investors, there were no restrictions on borrowing in currencies other than dollars, “so we will be engaging heavily in this.”
According to the new U.S. sanctions that came into effect on August 26, American investors will no longer be able to buy sovereign Russian bonds on the primary market. This essentially deprives the Russian MinFin of a section of its investor base abroad when offering bonds.
As for domestic borrowing, the federal budget for 2020 and the 2021 and 2022 planning period state that net domestic borrowing will be 1.7 trillion rubles in 2020, then 1.55 trillion rubles in 2021 and 1.8 trillion rubles in 2022. Gross borrowing will be 2.3 trillion rubles, 2.5 trillion rubles and 3 trillion rubles, respectively.
As usual, the equivalent of $3 billion has been budgeted for gross borrowing abroad, while net borrowing abroad is practically zero and could even be less than zero in certain periods.