A socially oriented non-financial development institution and a major organizer of international conventions; exhibitions; and sporting, public, and cultural events.

The Roscongress Foundation – a socially oriented non-financial development institution and a major organizer of international conventions; exhibitions; and sporting, public, and cultural events.

The Foundation was established in 2007 with the aim of facilitating the development of Russia’s economic potential, promoting its national interests, and strengthening the country’s image. One of the roles of the Foundation is to comprehensively evaluate, analyse, and cover issues on the Russian and global economic agendas. It also offers administrative services, provides promotional support for business projects and attracting investment, and helps foster social entrepreneurship and charitable initiatives.

Each year, the Foundation’s events draw participants from 208 countries and territories, with more than 15,000 media representatives working on-site at Roscongress’ various venues. The Foundation benefits from analytical and professional expertise provided by 5000 people working in Russia and abroad. In addition, it works in close cooperation with 126 economic partners; industrialists’ and entrepreneurs’ unions; and financial, trade, and business associations from 69 countries worldwide Russia also cooperates with 92 Russian public organizations and 54 regional governments.

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Research
28.03.2018

Debt Relationships Structure May Restrain Development and Growth in Russia

Currency risk for Russian financial system is mitigated in general. The only domestic foreign currency net borrower is the non-financial sector, but the negative currency position and the flow of payments under currency debt are secured by the sector’s export earnings. The currency debt position of the financial sector is almost balanced. On average, the share of foreign currency in the Russian debt is 40%, of which internal loans account for more than a half.


One of the roles foreign currency plays in Russia is hedging non-currency risks as, historically, weaker ruble coincided in time with other shocks. Investments in currency assets in order to hedge all possible risks impair the derivatives market in Russia.


With time, an interest rate risk can become more relevant than a currency risk. Targeting inflation, achieving low interest rates and a tight budget rule with less volatile exchange rates increase the likelihood of unsynchronised occurrence of interest and currency risks. The interest rate risk dominates in developed financial markets and, theoretically, it can manifest itself in Russia, not being hedged by revaluation of foreign currency assets. Average debt maturities are short in Russia.

The averaged bond debt maturity is 9 years, while the debt maturity dominating the banking sector is close to 2 years. The main reasons for such short-term maturities and their weak transformation: lack of understanding of the equilibrium of rates, prices, and rates, underdeveloped risks hedging tools. Underdeveloped long-term lending is a barrier for investment development, even against the backdrop of historically low interest rates, and a constraint for accelerated economic growth above the potential of 1.5-2%.



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