Ukrainian Army units shell Donetsk Republic in first hours of newceasefireWorld June 24, 5:19
Politician says Russia vs Mexico football game will be interesting to watchSport June 23, 21:11
Kyrgyz president sees revival of relations with Russia as major result of his tenureWorld June 23, 20:49
Ex-premier says initiative to impeach Poroshenko stems from Ukraine’s economy collapseWorld June 23, 20:20
This week in photos: Confederations Cup opening and summer solstice celebrationsSociety & Culture June 23, 19:11
Turkish ambassador to Russia: Moscow and Ankara to join efforts in war on terrorWorld June 23, 18:45
Ukraine’s finance ministry files appeal to London Court against Russia in $3 bln debt caseBusiness & Economy June 23, 18:42
Ukrainian society tired of Poroshenko’s policy — expertRussian Politics & Diplomacy June 23, 17:58
Deutsche Welle sees Russian international broadcasters as threat to European ideasWorld June 23, 17:34
MOSCOW, December 23. /TASS/. Russia’s $120 billion sovereign and corporate foreign debt repayments will exert main pressure on the ruble next year, former Finance Minister and head of VTB24 retail bank Mikhail Zadornov said on Tuesday.
Of this amount, Russian companies and banks will be able to refinance only 20-25%, Zadornov said.
Western sanctions and the closure of world capital markets for some Russian companies and banks have exerted considerable influence on Russia’s financial sector, the ex-finance minister said.
“In these conditions, neither the state nor enterprises nor banks can refinance their debts. This is because both portfolio and direct investors, and foreign banks, including Asian lenders, are not ready to take risks and provide any long-term financing, irrespective of whether Russian enterprises and banks are hit by the sanctions or not,” Zadornov said.
“They are not ready to take the risk. The direct impact of sanctions is that you can’t refinance the debt and you must repay it,” the ex-finance minister said.
This year, the state, banks and companies were required to repay about $130 billion, with most of these repayments scheduled for the second half of the year, Zadornov said.
The ex-finance minister cited the Central Bank’s statistics showing that the country’s aggregate debt contracted by $50 billion in the third quarter of 2014 alone.
“The currency is needed by those who have external loans — companies and banks in the proportion of two to one — they need to make foreign currency loan repayments and in today’s conditions they can’t refinance these debts,” Zadornov said.
In the current conditions, Russian companies and banks will have to buy about $70-80 billion on the domestic foreign currency market because western sanctions deny them access to international capital markets, he said.
“Or they’ll have to repay with foreign currency, which they have on their accounts. This is the first and primary factor of the demand for foreign exchange, which exists amid sanctions,” the ex-finance minister said.