America can’t stand it. Russia takes a new approach to paying off its bonds without default
Date 30 May 2022 time 18:05
Russia aims to pay off foreign debt in rubles after the US blocked the use of American banks
Reuters reported on May 30 that Russian government spokesman Dmitry Peskov said the project gas-for-roubles The Russian Ruble payment for gas buyers is convenient for both buyers and sellers. And the Ministry of Finance proposes to implement a similar program on holders of Russian Eurobonds abroad.
“Guidelines for paying gas in rubles It has shown ease for sellers and buyers. So why not use it for Eurobonds?” Peskov said, insisting that Russia has cash and is willing to pay off foreign bonds.
After the United States pushed Russia closer to a historic default last week. It prevented Russia from paying debt holders of government bonds through US commercial banks. By not extending the license that allows Russia to repay bond holders through US banks. and banks around the world The US Office of Foreign Assets Control (OFAC) issued the license on March 2 and will expire on May 25.
Russian Finance Minister Anton Siluanov told Russian newspaper Vedomosti that Russia plans to end its Eurobond commitments by using a mechanism similar to a scheme used to pay Russian gas in rubles. to protect their role as a reliable borrower by all possible means. and confirm that they are ready to pay all the obligations
Siluanov said Russia would settle foreign debts in rubles. If the US blocks other options and would not call himself a default because he had the money to pay off the debt
Siluanov explained that Russia would be able to bypass the Western payment infrastructure by making payments through the National Settlement Depository (NSD), whereby bond holders would have to open foreign currency and ruble accounts with banks. Russia The project will be reviewed by the government soon.
Russia is due to pay interest on $100 million on foreign bonds on May 27, but has failed to settle debt to US commercial banks. With a grace period of 30 days, it will be considered default. It was the first foreign bond default in more than 100 years since 1917.
Data from JP Morgan shows that Russia has about $400 million in dollar-denominated bonds due in June. In total, Russia is due to pay nearly $2 billion in debt to overseas bond holders by the end of the year.
Photo by REUTERS/Dado Ruvic/File Photo