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Russia’s Finance Ministry doesn’t enter global debt market due to sanctions — official

According to Storchak, Russia’s current state of affairs implies that extension of new credits to other countries bears heightened risks

BEIJING, January 18. /TASS/. Russia’s Finance Ministry does not see potential for entering international debt market and reserves priority on developing its national debt market, Deputy Finance Minister Sergey Storchak said on Monday.

"No, not yet. Restrictions haven’t been lifted, so what’s the point? All investors are banned from buying our securities," he said, adding that 2016 budget implies a possibility to borrow up to $3 bln internationally "in case the situation changes."

According to Storchak, the ministry does not yet have a certain schedule of issuing OFZ in yuan. "The process is simultaneously being supervised by the Central Bank and the Finance Ministry. The Central Bank [supervises it - TASS] from the viewpoint of preparing conditions for corporate borrowers' entering this market while the finance ministry is engaged from the viewpoint of how a sovereign will be acting," he said.

When answering the question about potential issuance this year he said that everything will depend on how the budget and ruble-denominated borrowing program will be executed. "The priority has always been and will always be mainly of development of national debt market and all the remaining only following," he said.

Storchak said Russia’s current state of affairs implies that extension of new credits to other countries bears heightened risks.

"Amid current environment, amid budget conditions that exist, new commitments on extension of credits to foreign borrowers is tied with heightened risks and risks related to fulfillment of those commitments in the future," he said.

When answering the question whether this means that a $5 bln loan would not be extended to Iran, Storchak said: "No agreements have been concluded with Iran. Talks are underway."

According to Storchak, in 2015 "fairly many" credit agreements were signed. "We assumed big commitments. However it’s even more disreputable not to fulfil commitments under extended credits than not to fulfill commitments on loans that have been raised," he said.

As of today Russia’s government has very low chances of deciding to extend new credits, Storchak said. "The budget is tough, more than tough. I think we’re facing a situation when we’ll be forced to take a break in assuming commitments on new credits," he said.

As was reported earlier Russia expects financing of 2 pilot projects in Iran to be launched in 2016 using the funds of $2.2 bln public loan.