(Adds quotes and context)
MOSCOW, May 13 (Reuters) - Russia will not tap the foreign debt market this year, and domestic borrowing will be significantly lower than planned, Deputy Finance Minister Sergei Storchak said on Tuesday.
A planned $7 billion in foreign borrowing this year will instead be covered by higher than expected budget revenues due to a weaker rouble and strong oil prices, Storchak said.
“We’re laying out the position that we won’t go onto the external debt market in the current year,” he said.
“The level of the rouble and good prices for Russian exports are beneficial for the budget. They give hope that the budget will be fulfilled with a certain surplus or at least with a zero deficit, which allows a reduction in the growth of government debt.”
The rouble has lost some 6 percent against the dollar this year, boosting receipts from oil and gas taxes that account for around half of federal budget revenues.
Russia’s Finance Minister Anton Siluanov said in February that Russia may have a balanced budget this year although it has pencilled in a 0.5 percent deficit.
However, Siluanov warned last month that it would unwise to boost budget spending at a time when capital is flowing out of the country.
He said that the finance ministry may borrow only 400 billion roubles ($11.5 billion) domestically in 2014 versus 800 billion roubles planned earlier.
Yields on Russia’s Eurobonds surged after Russia asserted its right to intervene militarily in Ukraine’s political crisis, peaking at 5.73 percent for the 2023 bond on April 25.
They have since retreated, with the 2023 bond yielding 4.88 percent on Tuesday, but the country’s potential cost of borrowing is likely to remain volatile as the crisis continues to unfold.
Reporting by Lidia Kelly, writing by Jason Bush; Editing by Catherine Evans