Russia: Moscow pays interest on debts in rubles and denounces bankruptcy “prank”

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Moscow has paid in rubles the interest on its debt obligations in dollars, the Russian Finance Ministry announced today, due to Western sanctions that have increased the risk of bankruptcy in recent months.

Russia’s Finance Minister Anton Siluanov has directly accused the West of trying to create the conditions for an artificial bankruptcy.

“Everyone who knows understands that this is not a bankruptcy. “Honestly, this whole situation is like a hoax,” he said. “Any day an investor wants to come and collect his money. “The corresponding amount in rubles will be waiting for him”, stressed the Russian Minister of Finance.

A statement from Russia’s Finance Ministry stated that the total amount of 12.51 billion rubles (about $ 235 million) in foreign debt service had been paid. “Therefore, the obligations of the Russian Federation are fully fulfilled by the country’s Ministry of Finance,” the same statement said.

The money was deposited in the National Settlement Depository (NSD) after President Vladimir Putin signed a decree on Wednesday on foreign bond payment procedures. Foreign bondholders will have to open a ruble account with the NSD to be paid.

Siluanov assured that “in order to protect investors from the risk of exchange rate fluctuations, the amounts will be adjusted based on the current ruble exchange rate until the time of payments to beneficiaries.”

At the end of May, Russia announced that it would repay its foreign debt in rubles, as it could no longer pay it in dollars due to the sanctions imposed on it.

The two dollar-denominated Eurobonds have provisions stipulating that payments could be made conditionally in euros, sterling or Swiss francs. However, they do not provide for payments in rubles, the currency used by Moscow.

As the three major international rating agencies no longer rate Russia, it is up to the Credit Derivatives Commission to decide whether Russia is meeting its obligations to its creditors.

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