Russian Finance Minister Orders Payment Transactions, Says It’s Up To Washington To Approve It
March 16, 2022–Russia missed a key deadline today to pay $117 million it owes on debt payments on two government bonds. Holders of the dollar-denominated bonds had not received a confirmation of payment at the close of business in London, according to reporting by Reuters.
That kicks off a 30-day grace period lasting until April 15. If the Russian government does not make payments by then, creditors can officially declare a default on the bonds. The bonds don’t come due until 2023 and 2043, but the interest payments are due now, NPR reported.
Impact Of Sanctions
Sanctions by a coalition of governments have frozen Russia’s holdings of dollars and gold. In a meeting with Russian President Vladimir Putin on March 10, Russian Finance Minister Anton Siluanov said the ministry planned to pay its external debt in Russian rubles, rather than U.S. dollars.
“We have established a special procedure for servicing external debt, including our national debt,” Siluanov said. “We will pay off our external liabilities in rubles and carry out the conversion by de-freezing our gold and currency reserves.”
But the attempt to pay in roubles would have triggered a default, according to reporting by the Financial Times.
Russia Says It Ordered The Payments
Still, Siluanov told the state-owned Russia Today Arabic that it ordered payment on the bond coupons and said it is up to the United States to allow it. Specifically, he said he ordered the payment to the international depository and clearing system Euroclear.
“The possibility or impossibility of fulfilling our obligations in foreign currency does not depend on us, we have the money, we made the payment, now the ball is in America’s court,” Siluanov said, according to Russia Today.
‘Junk’ Status
Furthermore, NPR reported that all three credit rating agencies had downgraded Russian government bonds to “junk status.” That means its debt is at a high risk of default. Fitch also downgraded 32 Russian banks.
Copyright secured by Digiprove © 2022 Patti Mohr