Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Kremlin Pressures Debtor Regions

Russia will cut allocations to regions that refuse to take part in a new bond issue program to recover $1.6 billion in unrepaid treasury credits, Deputy Finance Minister Vasilya Kovalyov said.

"Over each of three months, 33 percent of the credit amount will be deducted from federal support to the region," Kovalyov said at a news conference late Thursday.

The federal government has set up a program to allow regions to issue bonds to pay 9 trillion rubles ($1.6 billion) in defaulted 1996 agricultural credits owed to the federal government.

The first auction of discount bonds with 10 percent coupons and one-, two- and three-year maturities was last week.

But Kovalyov said 10 of 77 regions that had not paid back seed, gasoline and other credits extended last spring, had refused to address the issue.

Many regions, including Nizhny Novgorod, are instead planning Eurobonds to cheaply raise funds abroad.