Russia intends to sell as many bonds as possible this year to deal with the coronavirus crisis but the move will not be extended at any price. The comments were made by the country’s head of the debt department at the finance ministry, Konstantin Vyshkovsky, in an interview with Reuters.
The finance ministry has already allocated about 2.8% of the gross domestic product (GDP), which is the equivalent of $40 billion, to support the economy amid the COVID-19 pandemic. The support is offered in the form of budget money, tax breaks, and other programmes.
Vyshkovsky said that the current plan to raise 2.3 trillion
rubles ($30.8 billion) in treasury (OFZ) bonds and up to $3 billion in
Eurobonds by the end of 2020 remains unchanged. He added:
“If the budget needs an increase we will try to fulfill these needs as much as the market allows. But it should be driven by (market) demand.”
Russia might provide a “technical premium” of about 5 basis
points but not more than that.
Last month, Russia increased the upper debt ceiling to 12.98 trillion rubles in OFZ bonds and $64.4 billion in hard-currency bonds in 2020, though this is not the actual plan.
Vyshkovsky said the updated debt ceiling offered flexibility
to react promptly if the crisis worsens, but there was no plan to change the
actual state borrowing level.