Russia’s Finance Ministry said it is preparing to pay off some of its foreign currency debt on Wednesday, but those disbursements will be made in rubles if sanctions prevent banks from honoring commitments in the currency of issue.
“Is that a default? From Russia’s point of view, we are fulfilling our obligations“said the finance minister, Anton Siluanovin an interview with state television broadcast on Monday.
Western sanctions for the events of Ukraine they have isolated Russia from key parts of global financial markets and frozen almost half of the country’s $640 billion gold and foreign exchange reserves, triggering the worst economic crisis since the fall of the Soviet Union in 1991.
Siluanov said that Russia it has to pay the coupons of its Eurobonds on March 16 and has already asked Western banks to carry out the operation.
However, in the event that a significant part of Russian reserves is frozen, the payment could face “particular challenges”, since the possibility of these payments being made would depend on the sanctions.
The government is due to pay $117 million from two of its dollar-denominated bonds on Wednesday.
“If we see complications in the execution of the order, on Tuesday we will prepare a relevant transfer order in the ruble equivalentSiluanov said.
Russia it has the necessary funds to meet its external obligations and can also use a yuan portion of its gold and foreign exchange reserves if there is such a need, he said.
Source: Gestion
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