Russian authorities considering issuing 'patriotic' government bonds - source

MOSCOW. March 14 (Interfax) - The arsenal of instruments for raising funds on the Russian market to replenish the budget may soon see the addition of a fundamentally new type of bond.

The initiative to issue thematic, or "patriotic" bonds, is one of the proposals sent by the Ministry of Finance to the Russian government at the end of February, a source familiar with the discussion told Interfax. It is one of the points in a plan where the ministry assembled ideas for the development of financial market mechanisms and tools to ensure Russia's financial sovereignty, he said.

It is assumed that "patriotic" bonds will be issued on behalf of the government and distributed through banks, financial platforms and other financial institutions.

The Finance Ministry did not immediately respond to Interfax's requests for details of the offer, including potential volumes.

The ministry later confirmed the idea was being discussed but said there were no plans to place such bonds right now. "The MinFin has not proposed and is not currently preparing the issuance of 'patriotic' bonds. This matter was previously discussed as an initiative, but no details were not worked out. At present there is a wide range of investment opportunities for citizens, no additional tools are needed," the ministry's press service said.

As of now, the state has one tool to attract money from the population - Federal Loan Bonds. These bonds, a mechanism launched in 2017 and placed at market auctions, have always provided an insignificant contribution to budget revenues, and the Finance Ministry has called their main goal not borrowing for the budget itself, but increasing the financial literacy of the population and attracting citizens to financial markets. The bonds were placed among individuals through agent banks. In March last year, their placement was suspended due to the deterioration in borrowing conditions, after which the Finance Ministry announced that the objectives for issuing the bonds had been achieved and it was not planning to resume their implementation.