Zee Beam News

Aug 26.2006 RBC News - Russia's foreign debt went down from $76.5 billion (EUR 64.4 billion) as of 1 January 2006 to $72.9 billion (EUR 58.1 billion) on 1 July 2006, the Finance Ministry of the Russian Federation said. Russia's debt to the Paris Club creditors dropped by $900 million in the first six months of this year, to $24.3 billion. Debt to other countries was reduced from $3.5 billion on 1 January to $2.9 billion on 1 July. Debt to the members of the Council for Mutual Economic Assistance stood at $2 billion on 1 July, down $100 million from 1 January. Russia's commercial debt remained unchanged at $1.1 billion. Debt to international financial organizations was reduced by $200 million to $5.5 billion. Eurobond obligations went down $300 million, to $31.2 billion on 1 July. OGOVZ bond obligations were decreased $1.4 billion to $5.7 billion. Foreign currency-denominated guarantees were reduced from $300 million to $200 million. Russia's early payment to the Paris Club will save Russia's federal budget more than $12 billion in interest payments over the period until 2020. In 2007 alone the federal budget will save $1.2 billion on interest thanks to early repayment. In 2008, Russia will save $1.1 billion on interest payments, and $1 billion in 2009. Russia's debt to the Paris Club matures in 2012-2015, but in 2004 Russia offered to repay part of its debt early. On 30 June, Russia and the Paris Club signed a multi-party agreement allowing Russia to repay its remaining debt of $21.3 billion to the club. The debt had been restructured in 1996 and 1999. The early payment was made in the following way: at nominal value if interest rates were floating or fixed at 15 percent; while 85 percent of the debt with a fixed interest rate was paid at market value. Germany, France, Britain and the Netherlands received premiums of about $1 billion in total. Seventeen out of Russia's eighteen Paris Club creditors took part in the early repayment program. On 15 August Vnesheconombank paid over EUR 1 billion to the Paris Club of creditor nations, as the first installment under the early debt repayment agreement, and the final payments were made on 21 August. Russia's total public debt stood at $3.10411 trillion as of January 1, 2006, including $2.22868 trillion in foreign debt and $875.43 billion in domestic debt. Last year Russia's foreign debt was reduced from $114.1 billion (19.3 percent of GDP) to $81.5 billion (10.6 percent of GDP).