Russian foreign debt declined last year

BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/07

Preliminary figures from the Central Bank of Russia put the country’s foreign debt at $515 billion at the end of 2015. Foreign debt fell in 4Q15 by just over $20 billion as banks and firms paid down debt. During the whole 2015, the value of foreign debt decreased by over $80 billion. Some of the reduction reflects the depreciation of the ruble’s exchange rate. About one-fifth of Russian foreign debt is denominated in rubles. Foreign ruble debt appears to have in fact even increased last year.

Russian government foreign debt amounts to about $30 billion (2 % of GDP according to the new GDP figures). If the debt of the CBR and state-majority enterprises and banks are included, the public sector’s total share of Russian foreign debt is about half. Firms operating outside the banking sector hold most private sector foreign debt. However, over a third of that is debt in the form of intra-group liabilities.

Russia holds about $50 billion in short-term foreign debt. The CBR estimates that just under $30 billion of that comes due in the first half of 2016. Russia’s foreign currency reserves stood at $370 billion at the end of January. So for the Russian economy as a whole, paying down debt should not cause problems to forex liquidity. Individual firms, however, could have trouble settling their debts. 

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