Russia Borrows for First Time Since 1998 Default
By wchung | 22 Mar, 2026

Russia is likely to raise money on capital markets in late April for the first time since it defaulted 12 years ago as it faces a swelling budget deficit, the finance minister said Wednesday.

After the default in 1998, Vladimir Putin made a point of paying off the country’s massive Soviet-era debt and avoiding foreign borrowing during his eight-year presidency. Russia repaid the bulk of its debt by 2006.

But the government now is anxious to raise extra cash in order to manage a budget deficit which is expected to reach 6.4 percent of economic output this year.

Finance Minister Alexei Kudrin was quoted by Russian news agencies on Wednesday as saying that Russian officials would meet investors in Asia, Europe and the United States during a promotional tour on April 21-22 before placing eurobonds.

“When the road show is over, we’ll make a decision on the placement,” he was quoted as saying by the ITAR-Tass news agency, adding that the meetings with bonds investors will determine the timing and the size of the placement.

Kudrin also said that the first part of the sale is likely to be in dollars, but added that Russia is also thinking about selling Eurobonds denominated in rubles.

While the Russian government earlier approved borrowing some $17.8 billion abroad this year, Kudrin noted that Russia will borrow significantly less due to a favorable macroeconomic outlook and a surplus of liquidity on the domestic market.

Russia hired Barclays Capital, Citigroup, Credit Suisse Group and VTB Capital in February to arrange the issue.

Analysts have noted that while Russia does not need cash as badly as earlier thought, the placement is crucial to establish a new benchmark for corporate borrowing for a country which left the market after a default. The bond issue would also help Russia keep its $60 billion rainy-day fund intact in case oil prices collapse.

Russia’s economy contracted by 7.9 percent amid the global downturn last year, but has been on a rise since the third quarter last year thanks to strong oil and commodities prices.

Russia’s GDP was up 3.9 percent in February compared to a year earlier, and analysts expect it to rise by 2.5 to 4.5 percent this year.

Suicide bombings in Moscow subway and Russia’s province of Dagestan left investors largely unfazed as the Russian ruble continued its rise against the dollar and euro, and the stocks posted more gains on Wednesday.

NATALIYA VASILYEVA, Associated Press Writer MOSCOW