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MOSCOW, Jan 14 (Reuters) - Russia will be able to withstand possible restrictions on Russian debt that are being discussed by the United States, relying on domestic banks to provide enough demand for government bonds, Finance Minister Anton Siluanov said on Friday.
U.S. Senate Democrats on Wednesday unveiled a bill to impose sweeping sanctions on top Russian government and military officials, including President Vladimir Putin, and operations with Russian debt if Moscow engages in hostilities against Ukraine.
Possible restrictions on the secondary Russian debt market can be solved with the help of financial institutions that work in the country, Siluanov said.
"I think they will cope with that in case if such risks emerge."
Washington has already slapped sanctions on the Russian primary debt market, barring U.S. investors from buying Russian OFZ government bonds and Eurobonds directly from Russia. But sanctions have so far not limited investors' ability to buy Russian bonds on the secondary market.
Concern about possible sanctions and about geopolitical tensions buffeted Russian markets this week, causing a massive sell-off in bonds, which Russia uses to plug budget holes, as well as the rouble and stocks.
"What we see now with the rouble is clearly geopolitics... All these swings are short-lived," Siluanov said.
Relations between Moscow and the West have sunk to their lowest level since the end of the Cold War and are currently strained by a Russian troop build-up near Ukraine. Moscow denies it is planning an invasion and claims the right to move troops as it deems necessary within its own territory, demanding guarantees that NATO does not give Ukraine membership.
Siluanov said Russia will seek to calm investors with consistent and predictable fiscal and monetary policies.
Earlier on Friday, he said Russia will find the money to finance its obligations should new sanctions that target top government officials and banking institutions be imposed on Moscow. (Reporting by Darya Korsunskaya Writing by Andrey Ostroukh Editing by Toby Chopra and Frances Kerry)
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