Even if Russia avoids default, it could be a temporary respite. After all, in a few days in Russia comes the deadline for the next payment – interest on sovereign bonds.
The dollar payment, which the RF Ministry of Finance sent at the end of last week to repay Eurobonds, has not yet reached a number of holders of securities. This was reported by Bloomberg.
“Russia has a little more than a day to pay off two foreign bonds to investors and avoid default in a tight fight against sanctions. due to the fact that Russia tried to pay in rubles instead of dollars – ed.) “, – said in a statement.
According to Bloomberg, this may be the first default Russia's foreign debt for more than a century.
The countdown to default began when JPMorgan Chase & Co. suspended payments on bonds by order of the US Treasury. Russia has tried to circumvent the problem by paying in rubles after the United States banned the use of dollars from frozen Russian government accounts as part of sanctions. But the rating agencies did not accept the “ingenuity” of the aggressor country, and called it a violation of bond terms.
Then came a 30-day period when Russia could still pay accordingly to the terms of borrowing.
Late last week, Russia's finance ministry announced that cash was finally moving through the financial system. On April 29, the Ministry of Finance announced that it had transferred $ 564.8 million in Russia-22 Eurobonds and $ 84.4 million in Russia-42 securities, with “payments made in the currency of issue – in US dollars.” The agency assured that the obligations to creditors have been fulfilled in full.
According to Bloomberg, the Russian authorities used the bank “Dom.RF” for payments, which came under Western sanctions. He was to transfer the money to the correspondent bank of the Bank of New York Mellon Corp, and then transfer it to Citibank, which is to transfer the money to clearing agents.
p style = “text-align: justify;”> However, even if the funds come in and cover the repayment of bond payments, and Russia avoids overdue debt, it may be a temporary respite. After all, in a few days in Russia comes the deadline for the next payment – interest in dollars and euros on sovereign bonds.
“Russia's default. What does this mean? “, – read about it in the article by Yulia Samaeva for ZN.UA . Default is a non-payment of a loan or violation of the terms of such payment. Sovereign default is when the borrower who cannot repay debts is the state. Most countries regularly take out loans, but they avoid sovereign defaults, because then it is difficult to find people willing to lend money. Therefore, every sovereign default is an extraordinary event. History remembers the defaults of Argentina, Venezuela or Greece, although we are not as interested in their economies as we are in Russia.
