ST. PETERSBURG, May 25 (RIA Novosti) - Russia's early payment of its debt to the Paris Club of Creditor Nations will not affect the foreign exchange market, the finance minister said Thursday.
Alexei Kudrin said the government would use the reserves of a foreign exchange deposit account with the Central Bank for early debt repayment.
The government intends to sign an account agreement soon with the Central Bank to transfer the Stabilization Fund's money to a foreign currency deposit account with the Bank of Russia, Kudrin said.
Once this procedure is over, the government will only have to debit funds from its foreign currency account with the Central Bank, he said.
Kudrin added that the Central Bank would not require any foreign currency on the market for this purpose.
"This will be an operation that will not affect the market," Kudrin said.
The finance minister also said that Russia's state debt would be brought down to 12% of gross domestic product in the next two years compared with the 2005 level of 20%.
"In the next two years, we plan to reduce state debt to 12% of GDP. This means that we have removed all risks on the debt, which in 1998 [the year of Russia's financial crisis] were considered very high," Kudrin said.
