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. Last Updated: 07/27/2016

Kudrin Says Markets Will Be Simplified

ReutersKudrin listening to German Finance Minister Peer Steinbr?ck during a reception for G8 finance ministers on Friday.
POTSDAM, Germany -- Russia plans to simplify the rules for investment in its bond and equity markets to diversify its investor base, Finance Minister Alexei Kudrin said Saturday.

Russia's "bitter experience" in 1998, when the country defaulted on $40 billion of domestic bonds, means there is still a need to diversify its local debt market, Kudrin told reporters at a meeting of finance ministers from the Group of Eight. "There's a need for diversification of the investor base," Kudrin said. "We intend to introduce legislation to simplify the procedures for investors."

While Mexico's local debt is worth 30 percent of gross domestic product, and Brazil's 66 percent, Russia's local government debt is equivalent to 3 percent of GDP, Kudrin said. Russia is planning to simplify the administrative processes and amend taxation rules to make it easier for both individual and institutional investors to invest in the nation's bond and stock markets, Kudrin said.

"We are trying to introduce changes to the existing procedures such as the tax consequences, administrative and legal difficulties involved in investing in Russian equity and debt markets" for institutional and individual investors, Kudrin said.

"These changes will cut costs and make this market more accessible."

Kudrin said capital inflows would create challenges for the government to meet its 8 percent inflation target this year and might put additional pressure on the ruble to appreciate.