According to press reports, the Russian Federation has defaulted on its foreign debt for the first time since 1918. Bondholders told the press that they had not received payments from transcontinental countries. However, the Russian Ministry of Finance denied the allegations and said it made the payments through the Euroclear currency system.
Russia is accused of defaulting on its external debt, and Moscow’s Finance Ministry claims the country paid bondholders
mediareports, claimingthat Russia has defaulted on its foreign currency debt for the first time in over 100 years. Financial sanctions against the transcontinental country have made it difficult for Russia to access the international payments system. On Sunday, $100 million in interest payments were reportedly delayed after the U.S. Treasury Department blocked a method that would have allowed the Kremlin to convert rubles to pay its debt.
Now that the grace period is over, bondholders must agree on whether it is officially a default on the loan. Reuters argues that Russia’s move not to pay is “an act of political theater at the bondholders’ expense” and that a default would make them “political pawns.” But the Kremlin insists otherwise, saying that default is a “farce” because Western sanctions have blocked the country’s payments. Russia’s Finance Ministry said it had made payments to holders of euro-denominated bonds.
Russia condemns financial blockade – Kremlin spokesman says “it is not our problem”
Russian agencies say default claims are artificial, they have funds to pay and sanctions are stated that this is the only reason they do not have the ability to accept funds from the country. The last time Russia defaulted on its external debt was in 1918 during the Bolshevik Revolution, and an NBC reportquoted Kremlin spokesman Dmitry Peskov, who said that payments were blocked by Western sanctions and that because of this fact Peskov “is not our problem.” He reportedly stated.
The reportfurther claims that the Russian Federation took advantage of the onshore National Settlement Service (NSD) and the Euroclear currency system. The Kremlin claims to have fulfilled its obligations to foreign investors despite the financial blockade. Reuters reports that Russian President Vladimir Putin has codified a decree that selects certain banks to handle bondholder payment obligations. In addition, President Putin is aiming for a trip to Tajikistan on Tuesday, as it will be the president’s first trip there since the start of the ongoing war.
What do you think about media claims that Russia has defaulted on its foreign debt? Do you agree with the Kremlin’s statement? Let us know what you think about this subject in the comments section below.
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