Install

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

. Last Updated: 07/27/2016

Kudrin Pledges Early Debt Repayment

Russia hopes to repay $11 billion to $12 billion of Paris Club debt this year on the same terms as its 2005 deal and also lift all remaining capital controls ahead of schedule before year's end, Finance Minister Alexei Kudrin said on Thursday.

The final removal of the capital controls, which will make the ruble fully convertible, had been planned for Jan. 1, 2007.

"In practical terms, the government and the Central Bank will remove the capital controls earlier," Kudrin told a news conference on Thursday.

On the Paris Club debt, he said: "We expect it to be possible to repay Paris Club debt of $11 billion to $12 billion on the same terms as last year."

Russia last year repaid $15 billion of its outstanding Paris Club debt early at par without any early redemption premium. But dealers say its talks may be more difficult this year as Russian debt is seen as a good, quality asset.

Kudrin also sought to quell currency market speculation of a ruble revaluation by saying that the government would stick to the exchange rate targets of its 2006-08 fiscal strategy.

In response to a question about record forex volumes on the Moscow market on Wednesday, Kudrin said it was the responsibility of the Central Bank to comment on the exchange rate.

But he added: "The government will not change the rules of the game in its medium-term economic plan. The market's view is a matter for the market."

The ruble was trading near 28.24 to the dollar late Thursday, close to its opening level.

Trading of the Russian currency calmed down on Thursday after record volumes on Wednesday, driven by market speculation of a possible ruble revaluation.

Kudrin said high inflation and the appreciation of the ruble was undermining Russia's economic situation.

He said that Russia hiked spending by 350 billion rubles ($12.39 billion) at the end of last year. "We are fighting inflation with fewer weapons. You should never disarm yourself when you're fighting inflation," he said.

Kudrin also predicted a 40 percent increase in foreign direct investment in the next couple of years after the removal of forex restrictions, which will open up Russia to foreign investors and make it easier for them to repatriate profits and finance major investment projects.

 Russia backs diversifying energy sources away from oil and gas, Kudrin said Thursday, Bloomberg reported.