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Original title: Russia: US dollar debt paid but no guarantee that investors will receive it
Source: Wall Street News
Now the Federal Reserve has announced a 25 basis point interest rate hike as scheduled, and Russia has also started the payment process for the interest on mature bonds.
Russian Finance Minister Anton Siluanov said on Wednesday that interest payments on maturing U.S. dollar bonds had been processed, and payment instructions had been sent to a company that normally handles such transactions, RIA Novosti reported.Bank of Americabut there is a risk that cash will not pass through, and there is no guarantee that investors will receive it.
According to CNN, this is because the funds Russia uses to repay its debts come from Russian overseas assets that have been frozen.
RIA Novosti also reported that Russian Finance Minister Siluanov said that due to the sanctions freezing of the overseas foreign exchange accounts of the Russian government and the central bank, the dollar coupon payment may not reach bondholders.
In an interview with Russia Today (RT), Siluanov said that Russia has fulfilled its obligations to creditors. “The possibility or impossibility of fulfilling our obligations in foreign currency is not up to us,” Siluanov said, warning that the payment may not go through if the U.S. doesn’t allow it.
Siluanov also pointed out that Russia has enough money to pay its debts, but after unprecedented Western sanctions on its foreign exchange reserves, Russia has struggled to access about half of it, totaling $315 billion.
Regarding concerns about Russia’s debt default, Siluanov told Russia Today (RT) earlier this week: Claims that Russia cannot meet its sovereign debt obligations are untrue, and we have the necessary funds to meet our obligations.
Earlier, according to CCTV news reports, on March 14, Siluanov said that Western countries tried to artificially create Russia’s default by freezing Russia’s foreign exchange reserves, but Russia had spare funds to fulfill its obligations related to national debts.
However, there is no indication that bondholders have received cash, according to Bloomberg.
Bondholders in Europe and one in the U.S. said they did not receive cash in dollars at the close of business in their respective countries and did not know whether payments were made to Russian accounts in dollars or rubles.
“The situation is still fluid, and it has been since the sanctions were imposed,” said Antoine Lesne, head of ETF strategy and research at State Street, which holds Russian dollar bonds.
The U.S. Treasury Department has confirmed that it will not bar Russia from paying its dollar debts until at least the end of May.
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Responsible editor: Liu Xuanyi