Russia Has Defaulted On Its Foreign Debt S P Says

Moscow has a 30-day grace period from April 4 to make capital and interest payments, but S&P said it did not expect to convert them into dollars because of Western sanctions undermining its “willingness and technical ability to comply.” the terms and conditions’ of its obligations. Russia has no access to some $ 315 billion in foreign exchange reserves as a result of Western sanctions imposed after its invasion of Ukraine. Until last week, the United States allowed Russia to use some of its frozen assets to repay some investors in dollars. However, the US Treasury Department has since barred the country from accessing its reserves in US banks.
Kremlin spokesman Dmitry Peshkov told a news conference last week that any bankruptcy would be “artificial” because Russia has the dollars to pay – it simply cannot access them. “There is no reason for real bankruptcy,” Peshkov said. “It’s not even close.” – David Goldman contributed to the report.

title: “Russia Has Defaulted On Its Foreign Debt S P Says " ShowToc: true date: “2022-11-14” author: “David Kimmons”

Moscow has a 30-day grace period from April 4 to make capital and interest payments, but S&P said it did not expect to convert them into dollars because of Western sanctions undermining its “willingness and technical ability to comply.” the terms and conditions’ of its obligations. Russia has no access to some $ 315 billion in foreign exchange reserves as a result of Western sanctions imposed after its invasion of Ukraine. Until last week, the United States allowed Russia to use some of its frozen assets to repay some investors in dollars. However, the US Treasury Department has since barred the country from accessing its reserves in US banks.
Kremlin spokesman Dmitry Peshkov told a news conference last week that any bankruptcy would be “artificial” because Russia has the dollars to pay – it simply cannot access them. “There is no reason for real bankruptcy,” Peshkov said. “It’s not even close.” – David Goldman contributed to the report.

title: “Russia Has Defaulted On Its Foreign Debt S P Says " ShowToc: true date: “2022-11-16” author: “Shirley Kerr”

According to S&P, a selective default is stated when an entity has defaulted on a specific obligation but not all of its debt. Moscow has a 30-day grace period from April 4 to make capital and interest payments, but S&P said it did not expect to convert them into dollars because of Western sanctions undermining its “willingness and technical ability to comply.” the terms and conditions’ of its obligations. A full-fledged foreign currency bankruptcy would be Russia’s first in more than a century, when Bolshevik leader Vladimir Lenin rejected bonds issued by the tsarist government. Russia has no access to some $ 315 billion in foreign exchange reserves as a result of Western sanctions imposed after its invasion of Ukraine. Until last week, the United States allowed Russia to use some of its frozen assets to repay some investors in dollars. But the US Treasury Department has since barred the country from gaining access to its reserves in US banks, as part of an effort to increase pressure on Russian President Vladimir Putin and further reduce the burden of war. JPMorgan estimates that Russia owed about $ 40 billion in foreign currency at the end of last year, about half of which was held by foreign investors.

Moscow is preparing to go to court

Russia is now planning legal action. “We will sue because we took all the necessary steps to get investors to receive their payments,” Finance Minister Anton Siluanov told the pro-Kremlin newspaper Izvestia on Monday. “We will show the court the proof of our payments, to confirm our efforts to pay in rubles, as we did in foreign currency. It will not be a simple process,” he added. He did not say who Russia was planning to sue. Kremlin spokesman Dmitry Peshkov told a news conference last week that any bankruptcy would be “artificial” because Russia has the dollars to pay – it simply cannot access them. “There is no reason for real bankruptcy,” Peshkov said. “It’s not even close.” Russia has made every effort to artificially support the ruble – which sank up to 40% to less than a US cent in the days after the invasion – including raising interest rates to 20% and forcing exporters to trade most of the their income in foreign currency for rubles. The measure remains in place, but the central bank has decided to ease some other restrictions, Reuters reported on Monday and announced last week that it had cut interest rates to 17%. The ruble was trading at 79 US dollars on Monday, according to Refinitiv. This is about 5% weaker than Saturday. – David Goldman and Chris Liakos contributed to the report.