Russia will honor its foreign debt obligations in rubles if the United States blocks other options and does not default on itself, Finance Minister Anton Siluanov said.
Washington is considering blocking Russia’s ability to pay its US bondholders by granting a key waiver that expires May 25, which could put Moscow closer to bankruptcy.
Moscow must make another Eurobond payment on May 27.
“We’re not going to call defaults, we have money – unless western countries make it impossible to pay off our debts,” Siluanov told a forum. “We can and will pay foreigners in rubles as a last resort if Western (financial) infrastructure is closed to us.”
Western sanctions against Russia prohibit transactions with the Russian Ministry of Finance, the central bank or the national wealth fund.
But the US waiver, issued by the Treasury Department’s Office of Foreign Assets Control on March 2, had made an exception for the purposes of “receiving interest, dividend or maturity payments in connection with debt or equity.”
This allowed Moscow to continue to pay investors and avoid debt default, and to allow US investors to continue collecting coupon payments.
After the waiver expires on May 25, Russia still has nearly $2 billion in external government bond payments to make before the end of the year. (Reporting by Reuters; editing by John Stonestreet and Jane Merriman)
This post Russia to repay foreign debt in rubles if other options are blocked – finance minister
was original published at “https://financialpost.com/pmn/business-pmn/russia-to-service-foreign-debt-in-roubles-if-other-options-blocked-finance-minister-2”