Crisis prevents Ukrainian debt to Russia to capture the local market

Russia has ceased to raise money in local markets for a month since the Ukrainian crisis requiring expensive interests you, said Wednesday an official of the finance ministry.

“It’s the fourth time in a row that we canceled a debt issue because we believe that the interests require us are very high due to the political situation,” said Deputy Finance Minister Sergei Stortchak, quoted by Russian news agencies.

“This price not applicable to credit risk assumed by foreigners buying this debt or local investors,” he added.

According to the public agency Ria-Novosti, Moscow expected to issue a total of 140,000 million rubles (2.900 billion euros) in the Russian market in the third quarter, but has only three auctions held in early July.

Following the entry into force of the harsh economic sanctions by the United States after the fall flight of Malaysia Airlines in Ukraine that led Europeans to do the same, Russia has not been performing auctions since July 16.

These measures have affected the Russian markets, causing the withdrawal of some investors, but not the exodus observed after the annexation of Crimea in March. This has pushed the central bank to sharply raise rates to try to curb the movement and prevent the collapse of the ruble and a triggered inflation.

The situation is not critical for Russia, whose external debt represents just 10% of its Gross Domestic Product (GDP) and benefits from oil revenues. As you can afford to give these issues rather than accepting onerous conditions.

“However, we can not completely switch from investors this year and can not say I grasp waive debt in the domestic market,” said Stortchak.

Moscow maintains its plan to capture 7,000 million in 2015 on international markets, he said.