The US has confirmed this will phase out the temporary exemption that expires today and the allowed Moscow Transfer money to foreign accounts required for repayments and interest payments on Russian dollar denominated bonds held by US investors. The decision pushes Russia into an artificial default, the first since the 1917 Bolshevik revolution. Moscow has already announced its intention to do so the question before international courts. In fact, the Kremlin says it wants to meet its debt obligations and has the resources to do so, but is physically unable to make payments.
Meanwhile, Russia has announced that it will pay the $100 million coupons of a bond maturing the day after tomorrow in rubles instead of US currency until 2026. Russia is facing an “artificial situation created by a hostile nation,” said the finance minister Anton Siluanov in a note. “We have the money and the willingness to pay.” Payments in rubles are made to foreign investors’ “C” type accounts, which they can access after filing an application National Settlement Depot of Russia‘ the ministry said. US rating agencies Standard & Poor’s, Moody’s and Fitch However, they have made it clear in recent weeks that paying in rubles for dollar-denominated securities would qualify notice of default. Payments scheduled for May are relatively modest ($100 million), while payments scheduled for June ($394 million) and September ($372 million) are larger.
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US Treasury Secretary Yellen urges Russia into default: ‘Foreign Payments License Renewal Unlikely’
“The developments (in the case of the hypothesis of a default by Russia, editor’s note) are commonplace and I don’t want to anticipate them, but If you look at the market prices, these price in a high probability of default”. This was announced today by the number two of the International Monetary Fund Excursion to Gopinath at the World Economic Forum in Davos and stated that the world’s direct exposure to Russia “It’s manageable” and quote Italy and Austria as the most exposed countriesthat. However, “we do not know the indirect risk and in the event of further escalation, such as a default, if and when it occurs, we could see tensions in the markets.” The topic is controversial. US Government Advisor They denied that bankrupting Russia was desirable because it would allow Moscow to allocate even more resources to the war with Ukraine.
Meanwhile, Russia is struggling with one National currency, which is getting stronger. Despite today’s slowdown The ruble is the currency that has gained by far the most against the dollar since the beginning of the year (+30%). In fact, Moscow continues to receive huge cash flows from the sale of hydrocarbons, while its imports have fallen significantly due to sanctions, with a trade surplus now close to $100 billion.. Too strong a currency risks penalizing Russian exports even in countries that do not impose sanctions. The Central Bank of Russia will meet tomorrow A new cost reduction is also on the table to test the countermeasures. The Moscow Stock Exchange closed down 2%, with energy stocks up sharply: Gazprom +2.1%, Rosneft +5.2% as well Lukoil.
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