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Russia may borrow up to $7 billion abroad in 2017

By Lidia Kelly and Darya Korsunskaya

By Lidia Kelly and Darya Korsunskaya

MOSCOW (Reuters) - Russia may increase its foreign borrowing next year to $7 billion, but the decision will have to be taken carefully to avoid inflationary risks, Finance Minister Anton Siluanov said on Friday.

Siluanov's remarks follow the ministry's successful placement of a $1.25 billion Eurobond top-up on Thursday at a yield of 3.99 percent, lower than it was in 2013, before sanctions on Russia over its actions in Ukraine limited its access to foreign markets.

"Next year, we may come back to the foreign borrowing volumes achieved in previous years - about $7 billion," Siluanov told a briefing on the sidelines of the Moscow Finance Forum. Russia last borrowed that much in 2013.


"We see that such volumes are readily available to us. The only thing is ... we have to coordinate our plans with the central bank to make sure that those inflows do not seriously influence the strengthening (of the rouble), so that they don't affect our assessment of the balance of payments."

Siluanov also said that the ministry may raise issuance of domestic debt by 100 billion rubles ($1.58 billion) this year, which would bring the total to more than 1 trillion rubles.

The ministry also plans to place this year, as a test, some 30 billion worth of treasuries that would be sold directly to the Russian population [nS8N15S00C}

With privatization proceeds threatening to fall short this year, the ministry is seeking ways to diversify its methods of financing the budget deficit, expected to reach 3.2 to 3.3 percent of gross domestic product this year.

(Additional reporting by Darya Korsunskaya and Lena Fabrichnaya; Writing by Lidia Kelly; Editing by Larry King)