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Russian debt: Moscow recognizes two blocked payments, but denies any default

2022-06-27T13:50:34.976Z


Two Russian interest payments were blocked, when they were due to arrive this Sunday at the latest. However, Russia denies everything


It's a half-confession.

The Russian Ministry of Finance on Monday challenged any idea of ​​default in his country.

However, he admitted that two interest payments made on May 20 - of 71.25 million dollars and 26.5 million euros - had been blocked by intermediaries.

“The failure of investors to obtain money is not the result of non-payment but is caused by the action of third parties, which is not directly considered (…) as a case of default,” the ministry continued.

In anticipation of the blockage, the Department of Finance had effectively prepaid some $100 million in interest before restrictions came into full effect five days later.

But these sums were never transferred to the creditors, the banking intermediaries having blocked them because of the sanctions, underlines the Russian ministry.

Read also5 minutes to understand Russia's impending default

This Monday morning, the Kremlin also said that there was "no reason to qualify this situation as a default".

"It is not a defect of our country but the artificial and deliberate collapse of the international system of regulations", insisted to the Ria Novosti agency the vice-president of the upper house of Parliament, Konstantin Kosachev.

First default since 1918

Dmitry Peskov warned against any attempt by the West to appropriate, under the pretext of a default, Russian financial reserves frozen abroad within the framework of Western sanctions hitting Moscow because of the Ukrainian conflict.

They are "illegitimately frozen and any attempt to use them will also be illegitimate, it will be practically theft", he stressed.

Last week, Russian Finance Minister Anton Siluanov claimed that Russia had made interest payments on its dollar-denominated debt in rubles, denying the risk of a default by the country.

He then accused the “foreign counterparties” of refusing to make payments in foreign currencies and thus creating the conditions for an artificial default, calling the situation a “farce”.

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These two payments, which failed, are the last Moscow has attempted to make in foreign currency.

At the end of May, Russia announced that it would repay its foreign debt in roubles, no longer able to do so in dollars because of the sanctions, despite its significant financial liquidity.

However, a repayment in a currency other than that in which a debt was denominated exposes the debtor to a default on his debt.

The country defaulted on its national debt in 1998, but not on its foreign debt since 1918. hundreds of millions of dollars.

Source: leparis

All news articles on 2022-06-27

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