Government to be able to borrow up to an additional 1 trln rubles on domestic market in order to substitute for use of NWF resources
MOSCOW. Sept 28 (Interfax) - The Russian government will be able to borrow up to 1 trillion rubles in the domestic market next year to substitute for the use of National Wealth Fund (NWF) resources, Finance Minister Anton Siluanov told reporters on Wednesday.
"The gross volume of government internal borrowings in accordance with the draft law on the federal budget will be 2.5 trillion rubles. At the same time, in accordance with the draft law on establishing characteristics of the use of budgets of the Russian budgetary system in 2023, the Russian government will be entitled to borrow up to an additional 1 trillion rubles in order to substitute for the use of the National Wealth Fund in favorable market conditions," the minister said.
"This is approximately the volume of our participation in the three-year period. Is that a lot or a little? It's not small. It is about 1 trillion rubles more than in the pre-crisis year of 2019. How will we proceed? I have said before that we will act very carefully here. On the one hand, our task is not to spend the cash pile. On the other hand, it is clear that we do not want to increase rates and reduce duration in the market," Siluanov said.
Opponents of the Finance Ministry who are calling for increased borrowing to finance the budget deficit point to pandemic year 2020, when borrowing in the domestic market soared to a record 5.5 trillion rubles, he said. "But we can't have a 2020 every year, we understand that very well, and our task is to build a schedule," Siluanov said with respect to the Finance Ministry's position.
Earlier Siluanov said that the Finance Ministry would intensify borrowing on the domestic market, and the upper limit of government debt would be adjusted so as to minimize the use of the National Wealth Fund.
"The main focus is on domestic borrowing. This year, following the volatility on the financial market, we are beginning to place government securities. Next year, we will do this more actively, as we plan to increase the capacity of the financial market. In this regard, we will adjust the borrowing ceiling for the next two years so as to minimize the use of the NWF and to attract more resources from the financial market," he said at a government meeting last week.
In "an ideal situation" there are plans to abandon the use of the National Welfare Fund to cover the budget deficit, he said.
"The NWF, after reaching the necessary level that ensures budget stability and reliability, will be used to implement infrastructure projects," the minister said at the time.