The Kremlin, with access to its currencies blocked, intended to raffle with a devalued ruble the payment of a debt of 117 million dollars
The strategy of isolation, with its expulsion from markets and global organizations, the cascade of international sanctions and the ruble in free fall for weeks. All this pushed Russia towards the economic abyss last midnight, going bankrupt due to non-payment of a debt of 117 million dollars (around 105 million euros), which it had not felt since 1998, when the costs of the war in Chechnya they billed him.
Then oil and gas sales and international coverage allowed him to get ahead. But now that she has become a pariah for her onslaught on Ukraine and no one (or very few) wants anything to do with the Kremlin, the crash was seen at press time as inevitable. Although it will not be official until a month from now, when the 30-day grace period that the International Monetary Fund (IMF) grants by system expires.
The ‘default’, as this serious breach is known in economic ‘slang’, which tends to generate an enormous convulsion in the markets, does not occur because Russia does not have sufficient financial health to cover the debt, but because it does not have dollars to liquidate it. Or yes, but you can’t use them. In other words, by having access to its reserves in American currency (it is estimated at 300,000 million dollars), that drawer is closed. And the attempt to circumvent the problem by using the devalued ruble was unfeasible. The debt, corresponding to the interest charge of two bonds, had to be settled in dollars.
money without access
The president of the IMF, Kristalina Georgieva, already advanced days ago that the problem was coming:_”Russia has the money to pay, but cannot access it,” she stated. A dead end despite the fact that the Russian Finance Minister, Anton Siluanov, has been stressing since Monday that he would sign a “payment order to the corresponding bank” to transfer the amount of 117.2 million dollars. With this source limited, the option of pretending to comply in rubles implies de facto not paying, which would lead to repeating a precedent as far back in time as the Bolshevik revolution. In 1918 Lenin defaulted on the country’s foreign debt obligations.
From there, the implications. From the outset, the ‘rating’ agencies such as Fitch and Moody’s have reacted by throwing Russia’s credit rating to the ground; they have pushed it one step below the ‘junk bond’. This movement was more than predictable taking into account the future of the Russian economy since the West punished it with a cascade of sanctions that has not yet ended. Bankruptcy was seen as something “imminent.” Although Russia has defended itself, stating that it has an “artificial” character.
Its global impact? Affordable, as defended by the IMF. He does not see a global crisis because the 120,000 million dollars that Russia has linked to different international banks does not represent a “systemically relevant” amount, Georgieva declared.
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