Very soon Russian companies will be paying the bulk of their foreign debt obligations for this year. It is very likely that these payments will peak in early fall. It’s easy to imagine what kind of impact this is going to have on the already weakened ruble. Amid growing anxiety the Bank of Russia tried to defuse the situation a bit early in the week by claiming publicly that foreign debt payments were not going to affect the FOREX market.
Many companies have already partially completed creating foreign currency reserves on their books so no rush is likely
The information and analytical portal PROVED decided to look into the situation and asked experts for their opinion. The Deputy Head of the Department for Expert Analytics of the Analytical Center Daniil Nametkin told the publication that companies had already purchased foreign currency capitalizing on the temporary appreciation of the ruble so a rush on the foreign currencies was highly unlikely. The expert believes the Bank of Russia’s estimates for the amount of foreign debt payments are quite convincing.
“Many companies have already partially completed creating foreign currency reserves on their books, some of them having bought the currency they need as far back as the middle of Q2 when the ruble was fast gaining value, reaching an exchange rate of 49 rubles per dollar. Given the Bank of Russia’s estimates that suggest the actual payments will only amount to about 35 billion dollars because there is a very good probability that debt obligations within groups will be refinanced and extended, there is no reason to expect that this will have a significant impact on the exchange rate of the national currency, especially if we see increased volatility in the commodities market,” Mr. Nametkin said.