Russian Finance Minister: We will resist possible restrictions on government debt


MOSCOW, Jan. 14 (Reuters) – Russia will be able to withstand possible restrictions on Russian debt discussed by the United States, relying on domestic banks to provide sufficient demand for government bonds Finance Minister Anton Siluanov said on Friday.

U.S. Senate Democrats on Wednesday unveiled a bill to impose sweeping sanctions on senior Russian government and military officials, including President Vladimir Putin, and deals with Russian debt if Moscow engages in hostilities against Ukraine. Read more

Possible restrictions on the secondary market for Russian debt can be resolved with the help of financial institutions working in the country, Siluanov said.

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“I think they will deal with that in case such risks emerge.”

Washington has already imposed sanctions on the primary Russian debt market, barring US investors from buying Russian OFZ government bonds and Eurobonds directly from Russia. But the sanctions have so far not limited investors’ ability to buy Russian bonds on the secondary market.

Concerns about possible sanctions and geopolitical tensions rocked Russian markets this week, prompting a massive sell-off of bonds, which Russia is using to fill fiscal holes, as well as the ruble and stocks. Read more

“What we see now with the ruble is clearly geopolitical… All these fluctuations are short-lived,” Siluanov said.

Relations between Moscow and the West have fallen to their lowest point since the end of the Cold War and are currently strained by a build-up of Russian troops near Ukraine. Moscow denies planning an invasion and claims the right to move troops as it deems necessary on its own territory, demanding guarantees that NATO will not give membership to Ukraine.

Siluanov said Russia would seek to appease investors with consistent and predictable fiscal and monetary policies.

Earlier on Friday, he said Russia would find the money to fund its obligations if new sanctions targeting senior government officials and banking institutions were imposed on Moscow.

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Reporting by Darya Korsunskaya Writing by Andrey Ostroukh Editing by Toby Chopra and Frances Kerry

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