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. Last Updated: 07/27/2016

State Won't Borrow Abroad in 2003

Russia will not tap international debt markets this year, First Deputy Finance Minister Alexei Ulyukayev was quoted as saying Wednesday.

"The budget law provides for a $1.25 billion eurobond issue. We will not use this right this year," Ulyukayev was quoted as saying in an interview with Rossiiskaya Gazeta newspaper.

The government has said it can keep its books balanced without making the bond issue as long as the average price of oil stays above $20 per barrel. The Urals export blend was traded at $24.96 per barrel Wednesday.

The last time Russia issued a sovereign eurobond was in July 1998, when it restructured short-term domestic debt coming due into longer-term foreign debt. But that did not help it avoid domestic debt collapse.

Since then Moscow has been paying off foreign debt without refinancing. It plans to increase foreign borrowing after a 2003 debt repayment peak passes and Russia wins improved credit ratings.

The government had said it could tap international debt markets for $2 billion in 2004 to refinance some outstanding debt. Ulyukayev said the economy was coping well with the ruble's appreciation. He shrugged off complaints from some local businesses that believe that a strong currency is blunting their competitiveness.

Earlier this month he said an annual 10 percent real appreciation of the ruble against the dollar posed no threat to the economy.