Serbian newspaper Blic reported official s as saying that the Public Debt Administration is analysing the possibility of Serbia tapping the Russian market by issuing government bonds denominated in rubles worth up to $300m.
According to Branko Drcelic, director of the Public Debt Administration, this might happen in the course of this year, but only if it were cost effective. He said that the rouble has been stable over the past three or four years against the euro and the dollar.
"According to experts' predictions, the Russian financial market and the activities of the Russian banks will grow further. We expect also a higher level of investment in Serbia from that country and we believe that taking out a loan in roubles is a good option that should be considered," Drcelic says.
Economist Vladimir Gligorov says that the cost of this kind of debt should be evaluated against the trend of the exchange rate of the rouble.
"If the rouble is expected to strengthen against the dinar, that would be unfavourable, irrespective of the interest rate, which would depend on who the government bonds denominated in roubles would be sold to. The government mostly earns foreign currency by exporting goods for euros, whereas it would be repaying the debts in roubles or from tax revenues collected in dinars," Gligorov says.
He further says that Russia is in a different position, because it has a large surplus in foreign trade.
Source: bne