Russia assured today that it will continue to fulfill its obligations and pay the interest on its foreign debt, but it will do so in rubles after informing the United States Department of the Treasury of the expiration of the exception that allowed Moscow to deal with coupons in dollars until this Wednesday.
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“The Russian Ministry of Finance, as a responsible borrower, confirms its readiness to continue servicing and paying all debt obligations,” the department headed by Anton Siluanov said in a statement.
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“Taking into account that the refusal (of the United States) to renew the license makes it impossible to continue with the payment of the state foreign debt in dollars, disbursements will be made in the currency of the Russian Federation with the possibility of
its subsequent conversion to the original currency of the obligation,” said Finance.
The US Treasury Department reported last night that “the Office of Foreign Assets Control (OFAC) does not renew the provisions of general license No. 9C” that authorized the payment of Russian debt or securities in dollars.
The United States adopted this exception shortly after the imposition of US sanctions against Russia for its military intervention in Ukraine.but on a temporary basis to give foreign investors time to adjust or dispose of their investments.
Moscow considers that the Treasury Department’s decision on the license “infringes the rights of foreign investors who have invested in
Russian debt and undermines confidence in the Western financial infrastructure.
The Ministry of Finance specifies that payments to Eurobond holders of
foreign Russia will be held in special accounts of its financial intermediaries and establishes the “subsequent possibility of restoring access to these funds for investors who have provided the national depository with documentary evidence
of their rights to receive payments.
“The current situation has nothing to do with the situation in 1998, when Russia did not have enough funds to pay its debts. Now there is money and will
to pay This situation, artificially created by an unfriendly country, will not affect the quality of life of Russians,” Siluanov said in the statement.
So far Russia has been able to avoid a default on its debt.
If now it fails to pay its debt under the terms stipulated in the issuance prospectus, Russia would go into suspension of technical payment, but would have a grace period of 30 days to find a solution, as happened at the end of last April, when he managed to pay two Eurobonds in dollars at the last minute.
Last week, it also transferred to the national depositary entity the necessary funds in dollars and euros to pay the interest on two Eurobonds due in 2026 (71.25 million dollars) and 2036 (26.5 million euros) to meet its obligations.
As of April 1, Russia’s foreign public debt totaled $57.143 billion, including $37.26 billion in foreign bond loans.
In total, Russia has 15 active bonds with maturities from 2022 to 2047.
*With information from Efe
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