Heavy external debt repayment schedule might put downwards pressure on RUB
According to the CBR, Russia is scheduled to repay USD 43.7bn of external debt in both local and foreign currencies in 4Q12, with half of this sum (USD 24.1bn) due in December alone. Last year, the schedule implied repayments of USD 18bn in December out of USD 38.9bn in 4Q11. The detailed breakdown reveals that the public sector and the private sector (banks and corporates) are to pay back USD 0.8bn and USD 42.9bn, respectively, this quarter.
In practice, the CBR’s estimate for 4Q12 is likely to be exceeded and, as usual, most of the debt is to be refinanced. Given the current readings, the most important thing that we can extrapolate from this data is that RUB is likely to experience greater negative pressure in December than in October-November on the back of 2.2-2.8 times larger repayments of external debt. If this comes at the same time as negative dynamics in the oil market, RUB might hit 34 against USD.
Maxim Oreshkin, Daria Isakova
VTB Capital analyst
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