Russia will service its foreign debt on rubleswhich can be converted into the currency of the original Eurobonds at a later date, the Ministry of Finance announced today, as the basic payment waiver that allows Moscow to pay its foreign debt has expired.
The US Treasury Department announced that the payment license expires at 07:01 a.m. Greek time (0401 GMT) today, preventing Russia from paying interest and overdue payments to US bondholders for its public debt.
“The decision … primarily violates the rights of foreign investors in Russian bonds and undermines confidence in Western financial infrastructure,” the finance ministry said in a statement.
Last week, Russia hastened the advance payments on two international bonds – one in euros and one in dollars – before the settlement date of May 27 and as the payment license was about to expire.
Payments of nearly $ 2 billion in Russian international bonds expire before the end of the year.
The ministry reiterated today that it will continue to serve its external obligations, but in rubleswhich can be converted into the original currency of the bonds later through the National Settlement Depository (NSD).
“Payments using foreign financial intermediaries will be made to the C-type accounts of those financial intermediaries … with the possibility of restoring access to these funds for investors who have submitted proven written rights to such payments in the future,” the statement said. Russian Ministry of Finance.
Moscow has temporarily banned foreign investors from countries that have backed sanctions against it from selling their assets inside Russia and receiving payments for domestic bonds in rubles until the sanctions are lifted.
Government bond coupon payments are paid into Type C accounts in the National Settlement Reserve (NSD) and remain there until Western sanctions and Moscow countermeasures are lifted. The National Settlement Repository did not immediately respond to a request for comment from Reuters.
“The current situation has nothing to do with the 1998 bankruptcy, when Russia did not have the funds to pay its debt. “Today there is cash and the will to pay,” said Russian Finance Minister Anton Siluanov, according to the statement.
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