In the night from Sunday to Monday, Russia will have a grace period to pay about $100 million in back payments on government bonds. Due to the impossibility of paying the obligations due to sanctions, a breach may be registered in the country.
According to Bloomberg, Russia is "hours away from default." The agency notes that this will be the country's first foreign debt default since 1918. The default will not be officially announced, but the "fact of default on obligations" will be recorded.
“The market will face the unique scenario of an insolvent debtor who has the will and resources to pay, but cannot,” the publication emphasizes.
At the end of May, the US Treasury did not renew the license allowing holders of Russian sovereign bonds to receive servicing and redemption payments on these securities. The license expired on May 25, after which London-based Citibank refused to act as a paying agent for the Russian dollar bonds.
These functions were transferred to the National Liquidation Depository, which earlier this month was under EU sanctions. Then, the press secretary of the President of the Russian Federation, Dmitry Peskov, said that the West was pushing Russia towards an "artificial default", and the Minister of Finance, Anton Siluanov, described the creation of barriers to pay the public debt of the country as a "farce".
Author:
Ahmed Sadulayev
Source: RB
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