Russia has declared suspension of payments of its external debt by not accepting his creditors payment in rubles, says today the rating company Standard and Poor’s in a statement. Russia, which has its accounts in dollars blocked in the United States and also in other countries due to international sanctionshas tried to pay its bonds due April 4 in rubles, but investors have refused to accept it due to the practical impossibility of converting rubles into currency.
According to S&P, this equates to a “selective default” (selective default), which is declared when a country, institution or company defaults on some of its obligations but not on its global debt. In theory, Russia still has a so-called “grace period” of 30 days from that date of April 4 to make its principal and interest payments, but S&P considers it very unlikely that it will be useful.
“We do not expect at this time that investors will be able to convert ruble payments into dollars for an amount equivalent to the amounts due, nor that the government will be able to convert those payments in that thirty-day period,” the company says. Standard and Poor’s reasons that this is because sanctions against Russia are probably going to get tougher in the coming weeks, “hindering Russia’s will and technical ability to meet the terms and conditions to honor its obligations.”
to the courts
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From Moscow, the Russian Finance Minister, Anton Siluanov, stated that Moscow will go to court if the West declares the country in default of payment of its obligations in eurobonds, in an interview published this Monday by the newspaper “Izvestia”. “Of course, we are going to go to court, because we have taken all necessary actions so that investors receive their payments,” Siluánov said, stressing that Russia will be able to present evidence of its “efforts to pay, both in foreign currency and in rubles. “.
He insisted that “the Russian Federation, as a reliable debtor, did everything possible to pay eurobonds in foreign currency in which we place the debt, mainly in dollars”. “However, the conscious policy of Western countries consists of artificially creating a suspension of payments”, denounced the head of Finance, who added that when an “economic war is carried out and financial” against Russia, the country is forced to react.