The session on “Government Debt Management and National Capital Market Development” had Konstantin Vyshkovsky, Director of the Department of Public Debt and State Financial Assets of the Ministry of Finance of the Russian Federation, told about the market response to the sanction rhetoric and potential introduction of sanctions against the Russian Government debt.
“We can all see market players’ nervousness related to the recurring news about introducing sanctions against the Russian Government debt scheduled for discussion. At the same time, we believe there is absolutely no ground for panic. Despite quite a signiﬁcant share of non-residents on the Russian market, even in the worst case scenario when most of them cannot buy our debt instruments due to, say, sanctions on the Government debt, we do not see any reason to think that the Russian domestic market of government debt will shut down or cease to exist with us failing to perform our borrowing programmes as planned,” attested Vyshkovsky.
According to him, the main investor class on the market are Russian players, Russian banks, and, even in case of any restrictions or bans against foreign investors buying Russian Government debt, there is no ground to believe that Russian players will fail to substitute non-residents.
“Our conﬁdence is primarily based on the forecast liquidity surplus of the banking system. This is what we have always regarded as the key factor for the Russian banks’ active participation in the market,” clarified the Director of the Department of Public Debt and State Financial Assets of the Ministry of Finance of the Russian Federation.
Vyshkovsky added that the non-resident share on the Russian market has generally declined (33–34% as of mid-2018, 26–27% as of now) but no further decrease is expected.
“In terms of fundamental macroeconomic indicators on emerging markets, our Russian market with its low debt-to-GDP ratio is still investment attractive. We are conﬁdent that non-residents will maintain a significant share on the market,” he said.