RUSSIA SAYS PAYMENTS WILL BE MADE IN RUBLES BY THE DEBT SERVICE DEADLINE

Wed 25 May 2022:

Russia will begin paying its foreign debt in rubles as it approaches its debt service due deadline.

“Russia is not able to right now to borrow in global financial markets, it has no access to capital markets. If Russia is unable to find a legal way to make these payments, they technically default on their debt,” US Treasury Secretary Janet Yellen said as the Biden administration disallowed exemption for Russia to pay foreign debt held by American investors with funds held in Russia.

Russian finance minister Anton Siluanov accussed “unfriendly country” of “artificially” creating the current crisis.

On February 24, President Vladimir Putin announced a “special military operation” against Ukraine, which was met with sanctions from the US and numerous other European countries.

Although the Russian government attempted to pay in rubles, foreign bonds do not permit payment in the Russian currency.

According to reports, Russia will have to service two bonds in the next two days, one of which will be paid in dollars, euros, pounds, and Swiss francs, while the other will be paid in rubles.

On May 27, Russia will make its next debt payment. The last time Russia defaulted on its foreign debt was during the Bolshevik revolution in 1918.

Russia had recently cut gas supplies to Finland after Gazprom said the country refused to pay in rubles. Russia had asked “unfriendly” countries to pay for gas in rubles as it tries to defy Western sanctions.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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