For the first time in more than a century, the country faces the risk of defaulting on Russian sovereign debt
Russian Finance Minister Anton Siluanov said the country must take legal action if it is “Holded by the West” to pay off the country’s sovereign debt. The statement was made in an interview with the Russian newspaper Izvestia this Monday (11.Apr.2022).
“Of course we will sue because we have taken all necessary steps to ensure that investors receive their payments”said Siluanov.
The minister said he would present to the court evidence that Russia tried to pay off the debt both in rubles and in foreign currencies.
On April 4, Russia was supposed to have paid US$649 million to holders of its sovereign bonds, but the US Treasury blocked the transaction.
The West’s response to the Russian invasion of Ukraine, retaliation involves freezing the country’s $650 billion international reserves.
The country’s total debt in 2022 is US$4.722 billion. Of this volume, US$ 285 million were paid. At least $102 million was denominated in rubles, the Russian currency.
If indeed it happens, Russia’s default will be a direct result of the financial sanctions applied by the United States and Western European countries, according to the Russian government. These measures have already raised the country’s debt risk premiums. They also led to an increase in the basic interest rate from 10.5% to 20%, in addition to the depreciation of the ruble, the OECD (Organization for Economic Cooperation and Development) reported this month.
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