There are no grounds for Russia’s default, the country will fulfill its obligations. This was announced on Wednesday, March 16, by Anatoly Aksakov, head of the State Duma committee on the financial market, at a press conference.
“I don’t believe in default. There are no prerequisites and grounds for talking about this. Russia will calmly fulfill its obligations,” Aksakov said.
According to him, now the question is whether it is necessary to fulfill obligations to Western partners who do not fulfill them in relation to Russia.
On March 16, the Russian Federation must pay coupons on two issues of its sovereign Eurobonds for a total of $117.2 million. Russia has prepared a payment order for payments, but if foreign banks do not make this payment, payments on Eurobonds will be made in rubles.
On March 14, Russian Finance Ministry Anton Siluanov said that the freezing of currency accounts of the Central Bank and the Russian government can be regarded as the desire of the West to create an artificial default in Russia, which has no real economic grounds. The Minister noted that the Russian Federation has the necessary amount of funds to service obligations.
He said that Moscow is ready to make payments not in foreign currency, but in rubles at the rate of the Central Bank on the date of payment. For Eurobond issues issued since 2018, such an opportunity was laid down directly in the issuance documents, he added.
On the same day, the Ministry of Finance approved a temporary procedure for payments on public debt in foreign currency. The department will entrust the fulfillment of obligations under Eurobonds to agent banks, which will make payments in foreign currency within the time limits stipulated by the relevant documentation. In fact, payment will depend on the ability of the government and the Central Bank to manage the funds in their foreign currency accounts, depending on the sanctions.
On March 10, Siluanov said that Western countries had launched an economic war against Russia, trying to create a shortage of goods. He said the government has taken steps to attract capital to the country. The key task of the Cabinet is to stabilize the financial system of the state and ensure its smooth operation, the minister added.
Kristalina Georgieva, Managing Director of the International Monetary Fund, spoke about the possibility of Russia’s default against the backdrop of Western sanctions. According to her, the unprecedented sanctions imposed on Moscow have driven the country into a recession that will be deep.
Economic and political sanctions against Russia were imposed by Western countries after Russian President Vladimir Putin announced on February 24 the launch of an operation to protect civilians in the Donbass. As Kremlin spokesman Dmitry Peskov clarified at the time, the special operation has two goals – the demilitarization and denazification of Ukraine. According to him, both of these aspects pose a threat to the Russian state and people. The Russian side also emphasized that it does not hatch plans for the occupation of Ukraine, and strikes are carried out only on the military infrastructure of the Armed Forces of Ukraine.
For more up-to-date videos and details about the situation in Donbass, watch the Izvestia TV channel.
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