Home U.S. West pushes Russia into its first foreign debt default since 1918

West pushes Russia into its first foreign debt default since 1918

by admin
0 comment
The White House defaults to Russia’s invasion of Ukraine after Moscow reports that Moscow did not pay interest of about $ 100 million on two bonds during the 30-day grace period that expired on Sunday. Since then, he said it shows the power of Western sanctions imposed on Russia.

“This morning’s news about the discovery of Russia’s defaults shows how strong the reaction the United States has received with its allies and partners, and how dramatic its impact has been for the first time in more than a century. “.

Russia denied that it was the default, saying that payments were made in dollars and euros on May 27, and that the Belgian-based settlement agency Euroclear was behind.

Historical defaults were widely expected after half of Russia’s foreign exchange reserves were frozen and the US Treasury ended the sanctions that allowed US bondholders to repay by Russia.

The European Union has also made it difficult for Moscow to meet its debt earlier this month by sanctioning Russia’s national settlement vault, which is the agent for foreign currency-denominated bonds.

CHOOSE YOUR CHOICE GIFT CARD OFFER TODAY

Still, it took longer than many expected. Sanctions have largely failed to undermine Russia’s economy as soaring energy prices have filled the country’s financial resources.

Meanwhile, the Russian currency soared against the US dollar to a seven-year high.

The country was able to repay creditors in dollars in April after a long story on the brink of default. The Treasury Department said in April that it had created $ 565 million eurobonds due this year and $ 84 million eurobonds due in 2024. According to bond contract rules.

But this time it wasn’t possible given the recent moves by US and EU authorities.

Russia’s finance minister, Siluanov, said last week that state news agency Leah Novosti said the sanctions were “there is no other way to fund investors, except for payments in the Russian ruble” in Moscow. I told you.

The Russian Ministry of Finance said in a telegram post on May 27 that the Russian National Settlement Vault had paid the required $ 71 million and € 26.5 million.

Kremlin spokesman Dmitry Peskov said in a regular phone call with reporters on Monday that “the default claim is incorrect because the required currency was paid in May at the earliest.”

“It’s not our problem,” he said, the fact that the money sent to Euroclear wasn’t delivered to investors.

“Therefore, there is no reason to call it the default,” he said.

Euroclear cannot settle securities with sanctioned trading partners.

Since 2014, when the West last sanctioned Russia with the annexation of Crimea, the Kremlin has accumulated about $ 640 billion in foreign exchange reserves. About half of these funds are currently frozen under western sanctions imposed after the invasion of Ukraine.

It is not clear how defaults will affect Russia’s economy in the short term, as Russia is no longer able to borrow abroad and the value of existing bonds has fallen to the dollar’s penny.

But in the long run, Russians will almost certainly suffer. This country’s assault on Ukraine leaves few friends in the international community, and the default will probably block access to foreign funding for years.

— CNN’s Clare Sebastian and Phil Mattingly contributed to this report.

CHOOSE YOUR CHOICE GIFT CARD OFFER TODAY

You may also like

Leave a Comment

About Us

The USA Daily Sun is dedicated to bringing you news and opinions covering a variety of topical subjects. As our name implies; we focus on reporting the absolute best stories to come out of this great nation.

Copyright ©️ All rights reserved. | USA Daily Sun