Russia is considering tapping international debt markets for $2-3 billion next year in what could be its first borrowing abroad since the 1998 financial crisis, a senior finance ministry official said today.
"At this point we consider (borrowing) $2-3 billion next year," Mr Sergei Kolotukhin, a deputy finance minister, told reporters, referring to the volumes of Russia's foreign borrowing in 2004.
"But if the situation is favourable we may not need to." The last time Russia issued a Eurobond was in July 1998, when it restructured short-term domestic debt into longer-term foreign debt. But that did not help Moscow avoid a domestic market debt crash the following month.
Since then Moscow has been paying down foreign debt without refinancing and plans to increase foreign borrowing to refinance future debt repayments after the 2003 debt payment peak year is over and Russia wins a better credit rating.
The 2003 draft budget provides for a $1.25 billion Eurobond, but the government has said it could keep its books balanced without the issue as long as the average annual price of oil, Russia's main export item, stays above $20 per barrel.
Russia's main Urals export blend was traded at $23.55 per barrel today.
Russia has to pay $14.9 billion in foreign debt in 2004, $8.2 billion of it in principal. Russia has to service foreign debt worth $17.3 billion this year.