The foreign debt of Russian companies and banks recently dropped by $174 billion, Prime Minister Vladimir Putin announced yesterday
Addressing the State Duma yesterday, Prime Minister Vladimir Putin cited impressive data on the reduction of external corporate debt. Out of a debt of some $500 billion the companies have paid or rescheduled $174 billion over the past few months. "They did it independently without our support", Mr Putin stressed.
The figures he cited puzzled economists and analysts. According to the Central Bank, the foreign debt of Russian companies as of October 1, 2008 stood at $500 billion and by January 1 it had dropped to $452 billion.
In the 4th quarter the banks redeemed $32 billion worth of foreign credit and the corporations paid out $16 billion, said Natalya Orlova, the chief economist of Alfa-Bank.
To listen to the Prime Minister, the Russian borrowers have managed to pay back or reschedule another $126 billion in the first three months of the year, although under the Central Bank's schedule of payments they were supposed to pay out only $27 billion towards foreign debt.
Vedomosti discovered that the Central Bank provided the Prime Minister with updated numbers which differ from those commonly known. Mr Putin's report was based on Central Bank calculations which showed that as of October 1, 2008 the corporate external debt was as high as $540 billion, and by April 1 it amounted to about $370 billion, according to an official in the Government's economic unit. Central Bank officials declined to comment.
In the fourth and first quarters Russian companies and banks paid off no more than $70 billion, a Trust economist Yevgeny Nadorshin said. All the rest is the rescheduling of debt on which information is not publicly available, he believes. If the Prime Minister's figure is accurate, close to $100 billion of debt was restructured during the first quarter. In Mr Nadorshin's opinion, the majority of Russian borrowers have solved their foreign debt problem for this year by negotiating mutually acceptable terms with creditors. Foreign debt is one of the major risks for the Russian economy this year, Yelena Sharipova, an analyst with Renaissance Capital, believes.
Central Bank Chairman Sergei Ignatyev on Friday praised the banks which had spent part of the Central Bank's money to repay the debt to foreign creditors and buy back Eurobonds: "The banks were redeeming foreign debt and accumulating liquidity, and that was the right thing to do."
This year Russian companies and banks had to repay $120 billion of foreign debt, said Ms Sharipova. Mr Nadorshin agrees with that assessment. "This year the Russian companies are to pay $220 billion: $120 billion will be payments in roubles to banks inside the country, $60 billion payments to foreign creditors and the remaining $40 billion is dollar payments to Russian banks. "This is a staggering amount", Alfa-Bank President Pyotr Aven said in an interview with Vedomosti.
Gyuzel Ivanitskaya, Nadezhda Kudinova