Russia’s foreign debt decreased as the ruble weakened

RUSSIA ECONOMICS - In Brief 13 Oct 2020 by Alexander Kudrin
The Russian Central bank reported that the country’s total foreign debt decreased from January 1 to October 1by over $30bn to around $461.2. Sovereign debt shrank by over $10bn to around $59.4bn – largely on the back of the weakened ruble, which affected the value of the ruble-denominated bonds held by foreign investors. The foreign debt of the non-financial sector shrank by over $15.0 bn to $315.5 bn – also not least due to a weaker ruble, which similarly affected the ruble part of the corporate debt. Banking sector debt decreased as well – to $72.5 bn. Meanwhile, the foreign debt repayments (FX denominated) in 3Q20 also contributed to recent ruble weakness (apart from speculations on additional sanctions on Russia and other risks associated with the developments in some former Soviet republics.Foreign debt stays at around 30% of GDP. Given that as of July 1, around 30% of Russia’s total foreign debt was denominated in rubles (the currency structure of the foreign debt as on October 1 is not available yet), Russia’s net external FX position looks stable as the country’s international reserves fluctuate below $600bn. Evgeny GavrilenkovAlexander Kudrin

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