Is Russia Preparing to Issue ‘Patriotic’ Bonds?

It was reported on Tuesday on Interfax, which cited a source familiar with the matter, that Russia is preparing to launch so-called patriotic bonds to help fund its protracted invasion of Ukraine. The Russian Finance Ministry later denied the report and said that the idea was brought up but there are no plans on the way.

“The MinFin has not proposed and is not currently preparing the issuance of ‘patriotic’ bonds. This matter was previously discussed as an initiative, but no details were not worked out,” according to the ministry’s press service. “At present there is a wide range of investment opportunities for citizens, no additional tools are needed.”

According to Interfax, the idea of issuing patriotic bonds was one of several assembled by the ministry for the “development of financial market mechanisms and tools to ensure Russia’s financial sovereignty.”

Since the invasion of Ukraine a year ago, foreign investors have wound down their positions in the Russian bond market following the waves of sanctions imposed by the West. In January, Russia’s budget saw a record deficit of 1.8 trillion rubles as spending increased by 5.78% since the year before, and revenues dropped by 35%.

According to data from the MinFin via the Carnegie Endowment for International Peace, income from oil and gas fell to 426 billion — the lowest since 2020 — as Urals crude prices dropped and gas exports declined. 

But even with the 1.8 trillion-ruble hole, Russian President Vladimir Putin won’t be running out of funds anytime soon. 

Russia can borrow from its sovereign wealth fund, and its reserves of gold and Chinese yuan are estimated to be enough to fund the war for another three years, granted revenues stay where they are. The country’s military and social spending are also protected by law, ensuring they would be unaffected by budget cuts.


Information for this briefing was found via Bloomberg, Interfax, the Carnegie Endowment for International Peace, the Bell, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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