BOFIT Viikkokatsaus / BOFIT Weekly 2017/07

Preliminary CBR figures show companies and banks in Russia (Russian and foreign-owned) owed $470 billion (€446 billion) in foreign debt as of end-2016. The external debt-to-GDP ratio remained roughly unchanged at 36 %. Banks owed $119 billion (end-2015 $132 billion) and firms $351 billion (end-2015 $345 billion). For comparison, the domestic bank loans to firms amounted to $426 billion.

Unlike in the previous two years, the ruble's appreciation in 2016 supported the forex valuation of the foreign debt held by banks and especially other firms. Nearly 20 % of corporate debt and 13 % of bank debt is denominated in rubles. Banks continued to pay down substantial chunks of foreign debt last year, although the repayments were only about half of what they had been in the two previous years (effect of ruble exchange rate changes on dollar-value of debt eliminated). Corporate foreign debt payments became even more minor than in 2014–15 when they were already relatively small due to renewal of debt and postponed repayments. Unlike previous years when firms received some debt from parent companies and subsidiaries abroad, they slightly reduced this debt last year. Repayments of the other foreign debt of firms were very small compared to the two previous years.