Frankfurt, Apr. 11, (dpa/GNA) - The Russian state does not want to issue any more government bonds for the time being, in view of the economic sanctions imposed because of the ongoing Ukraine war, a minister said.
Russian Economy Minister Anton Siluanov announced that no bonds would be placed for the rest of the year, in an interview with the daily newspaper Izvestia published on Sunday night. He said Russia’s revenues from the sale of oil and gas, among other things, were sufficient to cover the state’s current expenses.
The minister referred to the high costs that would currently be associated with further borrowing for the Russian state. Such a measure makes no sense, he said, because the costs “would be astronomical.”
Siluanov was presumably referring to the high-interest rates that the Russian state would have to offer under the prevailing circumstances. Moreover, Russia is excluded from a large part of the financial world due to Western sanctions that severely limit the number of potential buyers.
His comments come as European leaders weigh further sanctions in an attempt to halt Moscow’s ongoing invasion.
Over the weekend, the US rating agency Standard & Poor’s (S&P) downgraded Russia’s credit rating once again, lowering it to “selective default”. This marks a partial default. Previously, Russia, whose foreign exchange reserves are largely blocked due to Western sanctions, had settled the repayment of two issues of bonds in roubles and not in dollars as had been planned.
With the downgrade, S&P also discontinued its assessment of Russia’s creditworthiness, a move that came after the other two leading rating agencies, Moody’s and Fitch Ratings, also stopped rating the country. All did so due to sanctions imposed by the European Union, which prohibit the agencies from rating Russia’s creditworthiness in the future.
GNA