Moscow wanted to pay interest on government bonds, which were due on April 4, in rubles after it could not use its funds frozen by Western sanctions.
–
However, a ruble transaction would be a breach of contract.
–
If Russia did not pay $ 649 million (roughly 14.6 billion crowns) by the beginning of May, it would be threatened with insolvency on the international financial markets.
–
Russia eventually paid out $ 84.4 million in bonds maturing in 2014 and repaid $ 564.8 million in Eurobonds due this year.
–
According to foreign agencies, Moscow used the services of Citibank to pay interest, but it did not comment on it.
–
Two Russian government bondholders have told Reuters they have not received interest yet. However, the payment may take several days, the agency said.
–
Bankruptcy cannot be talked about, but sanctions are suffocating Russia
If Russia did not pay the sums, it would technically go bankrupt, which would be the first time since 1998.
–
“The Ministry of Finance has the resources, and from an economic point of view, there can be no question of insolvency,” said Elvira Nabiullin, the governor of Russia’s central bank.
–
However, she admitted that Russia has problems with payments abroad. She said this week that sanctions have a severe impact on the country that the country has not yet fully felt.
–
“Sanctions imposed on Russia have affected the financial sector in the first place, increased interest in foreign currencies and led to sharp asset sell-offs, an outflow of cash from banks and a sharp increase in demand for goods,” Nabiullin said.
–
“In addition, the risks of financial instability have increased,” she added in a commentary on the development.
–
She stressed that Russia had not yet fully felt the sanctions. “Sanctions have affected the financial market, but only now will they start to affect the real economy, and increasingly so.”
–
She said businesses would have to continue to adapt to the new conditions to deal with the impact of sanctions. They will have to look for “new partners” and “new logistics routes” to supply their products.
–
“Currently, this problem may not be so acute because the economy still has stocks. But we can see that the sanctions are being tightened almost every day, including restrictions on the transport of Russian goods and the activities of Russian carriers, “the governor said, according to FoxNews.
–
USA: Moscow had to deplete part of its precious reserves
US Deputy Treasury Secretary Wally Adeyemo called Friday’s transaction a success in US sanctions. According to him, Moscow had to deplete part of its precious reserves.
–
