Monday, November 29, 2004
Russia hopes to repay $10 bn foreign debt in 2005
Reuters Moscow, November 29
Russia hopes to repay early $10 billion or more in debts to the Paris Club of sovereign lenders and the IMF next year, a Finance Ministry source told Reuters on Monday.
The source said he hoped a deal could be struck in January on repaying part of Russia's $46 billion debt to the Paris Club out of windfall oil revenues piling up in a budget stabilisation fund.
The comments were the most upbeat by Moscow on Finance Minister Alexei Kudrin's drive to channel budget surpluses into debt repayment and turn Russia from an 1990s economic basket case into a net creditor.
Russia would prefer to pay down the Paris Club debts in cash, after an earlier proposal of swapping the debt into Eurobonds proved to be "problematic".
Russia can also repay its entire $3.5 billion debt to the International Monetary Fund next year, the source told Reuters, speaking on condition of anonymity.
"Bearing in mind continuing high oil prices which, in all likelihood will next year exceed our budget forecast, we can spend over 300 billion roubles -- or over $10 billion -- on early redemption of our debt to the IMF and Paris Club," the source said.
Talks were continuing on the potential "haircut", or discount for early repayment, that Russia might obtain from the Paris Club in return for early repayment of Soviet-era debts assumed by Moscow.
Russia would in all probability repay debts in proportion to the amount owed to each Paris Club creditor country. Germany is Russia's largest Paris Club lender, with loans outstanding of around $20 billion.
"We hope to complete talks in January on the principles of a step-by-step early repayment of our debts," the source said.
© HT Media Ltd. 2004.