A view of the Moscow Kremlin and Saint Basil’s Cathedral.
Mikhail Japaridze | TASS | fake images
Russian Finance Minister Anton Siluanov said on Wednesday that it is up to the US. first foreign currency debt default in more than a century.
“The possibility or impossibility of fulfilling our obligations in foreign currency does not depend on us, we have the money, we pay the payment, now the ball is on the side, first of all, of the US authorities,” Siluanov said in a statement. interview with Arabic RT, according to the Russian news agency RIA.
“The Russian Federation has the necessary money in foreign currency accounts, it is possible to pay in rubles.”
Siluanov said Russia had the funds to meet its obligations and pay $117 million in interest on two sovereign Eurobonds due Wednesday. However, he said the United States should first clarify whether the deals are possible from Russian foreign currency accounts.
CNBC has contacted the US Treasury Department’s Office of Foreign Assets Control, which administers the sanctions, for comment. He was not immediately available to respond.
The United States and its international allies have imposed an unprecedented barrage of punitive economic sanctions against Russia in response to the Kremlin’s invasion of Ukraine. The sanctions have sought to isolate Moscow from the global financial system.
A key measure of the sanctions was to effectively freeze the funds of the Russian Central Bank approximately $630 billion of foreign reserve reserves.
Economists were unsure how Russia’s Finance Ministry would approach the payment in light of sanctions against Russia’s Central Bank that made much of its foreign reserves inaccessible, prompting a series of major credit downgrades. global rating agencies.
It is believed that Russia could try to deliver payment in rubles if a dollar deal is rejected.
Credit rating agency Fitch warned, however, that paying bondholders in a currency other than the dollar would constitute a default.
A bondholder who requested anonymity told Reuters there was still no confirmation of the Russian payment and it was unclear whether it would be made.
The prospect of non-payment would start a 30-day grace period before Russia falls into technical default, but the Kremlin will likely maintain that Western sanctions prevented it from completing the payment.
If confirmed after the grace period, the default would mark Russia’s first sovereign default since 1998, when it defaulted on domestic debt, and the first sovereign default on foreign currency debt since the Bolshevik Revolution in 1918.
Russian assets are increasingly seen as toxic by some market participants as the Kremlin continues its onslaught on Ukraine.
Hundreds of the world’s largest companies have decided that their presence in Russia is it is no longer feasible since the Kremlin attacked on February 24.
Siluanov of Russia indicated on Monday that Russia would use its reserves of Chinese yuan to make some of your payments, with euros and Dollars now inaccessible due to sanctions, and also suggested that creditors from “hostile” countries can be paid in rubles.
—CNBC’s Elliot Smith contributed to this article.