On Wednesday, Russia’s finance ministry borrowed $13.6billion (£11.4billion) as it conducted its biggest ever debt issuance in a single day in order to continue Vladimir Putin’s faltering invasion.
In its latest intelligence report, the Ministry of Defence (MoD) warned that the money raised is a “key mechanism to sustain defence spending”.
While the amount raised suggests confidence in the current fiscal climate, the ministry is likely “anticipating an increasingly uncertain fiscal environment over the next year”, the MoD said.
Latest Defence Intelligence update on the situation in Ukraine - 19 November 2022
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The ministry added: “On November 16 2022, Russia conducted its largest ever debt issuance in a single day, raising RUB 820 (USD $13.6billion).
“This is important for Russia as debt issuance is a key mechanism to sustain defence spending, which has increased significantly since the invasion of Ukraine.
“Russia’s declared ‘national defence’ spending for 2023 is planned at approximately RUB 5 trillion (USD $84billion), a more than 40 per cent increase on the preliminary 2023 budget announced in 2021.”
They added: “Debt issuance is expensive during periods of uncertainty.
“The size of this auction highly likely indicates the Russian Ministry of Finance perceives current conditions as relatively favourable but is anticipating an increasingly uncertain fiscal environment over the next year.”
It comes as Russia claimed to have “successfully” carried out flight tests of its giant Satan-2 hypersonic missile.
No launch details were given in the announcement by the Russian defence ministry, which came amid speculation that the missile’s development was running behind schedule. Western sources are yet to verify the report.
The missile, officially named the RS-28 Sarmat, is as big as a 14-storey tower block and Russian propagandists regularly threaten to use it against Western enemies, especially the UK and US.
Meanwhile, investigators confirmed that “gross sabotage” ruptured the Nord Stream pipelines earlier this year after finding explosive traces on the Baltic Seabed.
The pipes, a major route for Russian gas supplies for Europe, were damaged in September. Russia has denied it vandalised the pipelines.
After suffering major setbacks in Ukraine, Russia has carried out multiple missile strikes which have allegedly destroyed almost half of the country’s energy system.
Ukrainian President Volodymyr Zelensky said earlier about 10 million people were currently without power in a country with a pre-war population of about 44 million. He said authorities in some areas ordered forced emergency blackouts.
“The aggressor country has officially recognised that its goal is to destroy our energy infrastructure and leave Ukrainians without electricity and heat,” Ukraine’s national grid operator Ukrenergo said.
It said Russia had launched six large-scale missile attacks on Ukraine’s energy infrastructure in October and November.