CBR releases elaborated assessment of foreign debt servicing payments through end of this year

BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/33

The Central Bank of Russia estimates the actual amount for foreign debt of banks and non-bank corporations coming due in the final four months of this year is $35 billion rather than its statistically recorded $61 billion. The CBR’s specified estimate aims at excluding “intra-group operations” which the CBR views as having a high likelihood of becoming refinanced. The estimate is based on earlier debt-servicing trends and a survey of Russia’s 30 largest companies.

As a result, the CBR does not expect excessive forex demand in the final months of this year to pay off foreign debt. It noted bank and non-bank firms currently hold about $135 billion in liquid foreign assets. Russia can also pay down foreign debt out of its current account surplus. The CBR now projects a current account surplus of $20–28 billion for 2015, if the oil price stays in the range of $40–60 a barrel. The CBR also said it has $14 billion in untapped funds it can make available as forex repo credits.

With foreign debt-servicing payments set to peak in September and falling oil prices depressing the ruble, forex markets have become quite skittish in recent weeks.

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