Banking & Finance Weekly Report.(briefs)
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Russia’s state debt has dropped to below 50% of GDP, Deputy Prime Minister and Finance Minister Alexei Kudrin said. Russia’s current level of state debt is lower than the debt of several developed countries and the actual volume of debt no longer causes concern, he said. Kudrin said the debt still remains too expensive to service, pointing out that Russia can borrow at more than double the price than European countries. This restricts the Finance Ministry’s ability to refinance debt. To make all foreign debt payments due next year the government will have to use a whole spectrum of financial instruments, including the use of the financial reserve and budget surplus, Kudrin said. FINANCIAL POLICY RUSSIA PLANS TO SWAP SOVIET-ERA COMMERCIAL DEBT FOR BONDS IN 2002 Russia will swap Soviet-era commercial debt and debt before the International Investment Bank and the International Bank for Economic Cooperation into Eurobonds maturing in 2010 and 2030 this year, the Finance Ministry reported in a press release. The government officially published resolution No. 426 from June 14 2002 on the settlement of Soviet-era debt before the International Investment Bank and the International Bank for Economic Cooperation, the press release states. “The adoption of this resolution endorses the Finance Ministry’s earlier announced plans to fully settle Soviet-era debt, including before commercial creditors, and confirms plans to settle the different categories of Soviet-era debt according to schedule,” the ministry said. FINANCIAL POLICY RUSSIA PLANS TO PAY $17.2 BLN ON FOREIGN DEBT IN 2003 Russia plans to transfer $17.2 billion in payment of the foreign debt in 2003. It is planned to pay 220.027 billion rubles (approximately $6.4 billion) on the interest and $10.8 billion on the main debt. Foreign debt payments in 2003 will exceed those of 2002 by nearly $4 billion, the materials say. The reason is the redemption of Eurobonds and the fourth tranche of an OVVZ foreign currency denominated loan. Next year Russia will transfer $2.7 billion to international financial organizations, including about $1.9 billion to the International Monetary Fund and about $0.8 billion to the World Bank and the European Bank for Reconstruction and Development. Transfers to foreign governments will amount to $4.1 billion, including $2.7 billion to be paid on the Soviet-era debt. Payments on the main debt to Paris Club member countries will be enlarged under bilateral agreements, the materials say. |