Siluanov said the unnecessary external borrowing


Russia is not interested in attracting external borrowing to Finance the budget deficit, said Finance Minister Anton Siluanov, speaking at the St. Petersburg international economic forum (SPIEF). “We are, indeed, foreign currency borrowing is not necessary, we need rubles”, — he told, answering a question from the moderator about why the Finance Ministry has placed Eurobonds not $3 billion as planned, and only $1.75 billion.

“External borrowing is an inflow of currency into the country. If we attract a considerable amount of currency, then this will affect the ruble, to its further strengthening”, — said Siluanov.

Earlier, speaking in Minsk, the Minister said that the government is not interested in strengthening of the ruble. “Now there is no hard and direct relationship between oil and the ruble. On the course affects a lot of things, including decisions of the Federal reserve system of the United States, which is expected to raise rates, so we will see. We are also not interested in the strengthening of the exchange rate”, — quotes the Minister TASS. He added that neither the Treasury nor the Bank of Russia there is not a specific corridor for the retention of the ruble and, most importantly, to avoid excessive volatility and the equilibrium of the balance of payments. For this, according to officials, necessary to carry out tight fiscal policy.

At the end of may 2016 the Ministry of Finance completed the placement of 10-year Eurobonds for $1.75 billion under 4.75% per annum. The organizer of the placement was the daughter VTB — “VTB the Capital”. As reported a press-service Agency, investor demand for the bonds exceeded supply by several times and reached $7 billion, More than 70% of the securities bought by foreign investors.

According to Siluanov, the Finance Ministry could bring to the West much more than $1.75 billion. “We have recorded its presence in the market. Used domestic financial institutions,” he said during a speech at the SPIEF. “We have no shortage of currency exchange in the country enough”, — said the Minister.

Anton Siluanov also explained why buyers of Russian sovereign Eurobonds were mostly foreign investors. According to him, Russian banks are “now a lot of foreign exchange liquidity, they are looking for a use”. “If we decided to take this excess foreign exchange liquidity to banks, thus caused the increase in interest rates on foreign currency deposits. Banks could decide to involve the population more currency, invest it in reliable debt instruments and to attract income. The banks did not earn on the dollars attracted from the population, we decided to reduce the amount of borrowing,” — said the head of the Ministry of Finance.

All according to the plans of the Ministry of Finance this year the volume of external borrowings was $3 billion But in may, Anton Siluanov said that the Finance Ministry sees no need another output on the external debt market this year. The remaining loans for $1.25 billion provided for by the foreign borrowing programme for 2016, could be replaced by domestic ruble-denominated borrowings, told journalists the Minister. “Us foreign money — dollars, euros, is not needed, we can take the same amount in rubles”, — quotes its words of RIA Novosti.

Anton Siluanov believes that to Finance the budget deficit by borrowing on the domestic market, as we are talking about the loans in rubles, which pays for the budget. Moreover, according to the Minister of Finance, domestic borrowing in the next three years will inevitably increase. “Even reducing the budget deficit, we have to increase presence in the market, because the Reserve Fund should be protected, not to spend the reserves,” said Siluanov.

conducts online broadcast of the St. Petersburg economic molding