Paris Club, Russia agree on early debt repayment

Russia has reached an agreement with its sovereign debt creditors for an early repayment of US$22 billion (Ђ17.6 billion) of public debt, the Paris Club said Friday.

Photo: Paris Club, Russia agree on early debt repayment

In a statement, the group of creditor countries said the agreement was reached at meetings on June 15 and 16, and that the deal will be effective soon, once Russian authorities sign it.

The Paris Club noted that the early repayment is the largest such transaction in the organization's history.

Although Russia owed a large debt to its Western creditors, it also sits on the other side of the table at the Paris Club as a major creditor nation in negotiations with financially distressed countries.

The rise in the price of oil and raw materials has meant that Russia and some other nations have been able to repay debt owed to sovereign creditors and international financial institutions.

During a trip to Belarus for a summit, Russian President Vladimir Putin told reporters: "In the late 1980s, the U.S.S.R. attracted major foreign debts to solve social issues.

"Today Russia does not need foreign debts to solve such questions," he said. "Russia relies now on the growing potential of our economy."

The agreement is expected to save Russia some US$7 billion (Ђ5.6 billion) in debt service payments, reports AP.

O.Ch.