Russia May Turn to Foreign Banks for Loans to Cover Deficit — April 15, 2009

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The New York Times discusses Alexei Kudrin’s statement that Russia may borrow from foreign banks for the first time in a decade to bridge a budget deficit next year. It signaled that the Kremlin was planning for a long recession that could deplete its oil windfall funds, Andrew Kramer reports. In his comments on Tuesday, however, Kudrin signaled in the strongest terms yet that Russia would turn again to foreign borrowing for the first time since a sovereign default in 1998. He said the government this year would hold a road show to familiarize investment banks with Russia’s finances even before a final decision was made on issuing new bonds. In making the announcement, Kudrin suggested that the government was not in dire need of financing. The author states that Kudrin’s statement was vague about the details. “It would probably be worthwhile for us to consider the possibility of going to capital markets abroad in 2010,” the minister said.