After the threats against the West Russia is struggling to pay off its debt for the first timeso President Vladimir Putin was forced to do a withdrawfailing to comply with the obligations that he himself imposed by issuing a certain decree.
We have already talked about the unsuccessful attempt to use rubles to pay for dollar bonds and the risks that Moscow would face if it does not regulate its position in time. And indeed, the plan the Kremlin was working on to circumvent EU bans and sanctions and still get the money for the war (read more here) seemed to confirm the tsar’s intention and didn’t seem to budge. In the last few hours, however, theo Scenario changed and Putin had to revise his positions.
Russia in trouble, so Putin wants to avoid a default
This is not the first time Russia risks default. With the war in Ukraine lasting only days, the government has been economically and commercially isolated and has had to deal with a whole series of sanctions that have provoked an unprecedented crisis.
However, the situation became complicated after ruble payments on two dollar-denominated bonds were suspended in early April. The country therefore risked becoming insolvent and therefore inevitably struggling with the Mistake. To avoid this, the Russian Treasury announced on Friday April 29 that it would send the dollar payments to Citibank. The first payment was $564.8 million for a 2022 Eurobond and the other was $84.4 million for a 2042 bond. Putin With a decree passed at the end of March, he broke the rules he had imposed, which required citizens and businesses in the region not to accept or send foreign currency for sales of any kind. In fact, the only accepted payment would have been the ruble.
The ultimatum to Russia and Putin’s regression
Russia had already tried Pay off the bonds in rubles due on April 4, but payments were refused and given 30 days to settle. Now that the debt has been paid in dollars as required, the May 4th deadline will be met and historical payment defaults are avoided.
The regression of the Russian government in this position is a clear sign of the difficulty, albeit on the military front Putin is determined not to stop and to put his expansion programs into action. Their main strategy is still the threat (to the NATO countries, to those bordering Ukraine, even to the West as a whole). He recently stated that he is willing to resort to weapons that have never been used (we were talking about the secret arsenal the tsar possesses here), but is he really willing to do anything, or is it propaganda aimed at his scare opponents?