Russian officials are looking for ways to plug gaps in their budget while planning a prolonged war against Ukraine.

As UK Defence Intelligence reports, one such way is to issue a portion of Russia's sovereign debt in foreign currency. Russian Prime Minister Mikhail Mishustin announced such a possibility on 28 September.

"The move is almost certainly an indication that Russia anticipates external financial support from foreign states it deems ‘friendly’. Once the development is completed, investors from other countries will be able to purchase Russia’s sovereign debt and therefore finance some of Russia’s future budget shortfalls.

Such investors would be indirectly financing Russia’s invasion of Ukraine," UK Defence Intelligence noted.

"In recent months, Russia’s own banks have been the main entities purchasing Russian state debt. However, they are unlikely to have the capacity to fully fund anticipated future budget deficits.

Russian officials likely see external debt issuance as one way to plug gaps in Russia’s finances as they plan for a long war in Ukraine. However, it remains unclear whether Russia will succeed in implementing the measures."

Earlier, UK Defence Intelligence suggested that Russia is likely working on creating new private military companies (PMCs) that could become an alternative to the Wagner Group PMC in the war against Ukraine (Ukr).