December 25, 2014. Sverdlovsk Region’s law on the constituency’s budget in 2015 and the constituency’s government internal loan program Sverdlovsk Region to take out some budget loans next year, Governor of Sverdlovsk Region’s Information Policy Department reports.

Just like a year earlier, loans from non-state institutions will be made in the form of credit lines, which will allow for faster decision-making; the actual borrowing policy will depend on the budget revenues within a particular time period. All this will allow the borrowing party to cut debt servicing costs.

The interest rate for loans taken out from the federal budget comes to 0.1% a year.

The Finance Minister Galina Kulachenko explains the ministry signed the agreement with Sverdlovsk Region division of the Federal Treasury in April.

‘Budget loans were taken out and paid back five times between June and November, the total sum coming to 13bn RUR (with 2.5m RUR worth of interest payments). A similar agreement for 2015 is being drafted at the moment,’ the Minister said.

Kulachenko says these loans from the federal budget helped the constituency contain government debt growth throughout the year and save over 900m RUR in debt servicing costs.

As for the recent changes in the upper limit on the amount of government bonds Sverdlovsk Region is allowed to issue, these have to do with the need to comply with the amendments to Sverdlovsk Region Budget Act adopted on December 17, 2014. The upper limit was brought down due to the constituency’s budget deficit and the increase in the cost of borrowing on the securities market. Thus the government bonds limit was reduced from 6bn RUR to 2.4bn RUR. The government will be making decisions on expanding its bonded debt depending on the state of the budget.