Russia will take legal action if the West tries to create an artificial default in the country, Izvestia newspaper quoted Finance Minister Anton Siluanov as saying on Monday. The US blocked Moscow’s payment to its bondholders last week.
“Of course, we will sue, because we have taken all the necessary steps to ensure that investors receive their payments,” Siluanov said in an interview. “We will present in court our bills confirming our efforts to pay both in foreign currency and in rubles. It will not be an easy process. We will have to very actively prove our case, despite all the difficulties.”
The minister earlier said the country would do everything possible to make sure its creditors are paid.
“Russia tried in good faith to pay off external creditors,” Siluanov said. “Nevertheless, the deliberate policy of Western countries is to artificially create a man-made default by all means.”
Russia’s external liabilities amount to about 20% of the total public debt, which stood at about 21 trillion rubles ($259 billion), according to Siluanov. Of that, between 4.5 trillion rubles ($55 billion) and 4.7 trillion rubles ($57 billion) were external liabilities.
Last week, US authorities stopped the Russian government from paying holders of its sovereign debt more than $600 million from reserves frozen in American bank accounts. JPMorgan, which had been processing payments as a correspondent bank, was stopped by the US Treasury, it was reported. Now Russia has a 30-day grace period to make the payment.
Since February 24, when the military operation in Ukraine was launched, Russia managed to make as many as five bond payments, having averted the default that was predicted by international rating agencies.
“If an economic and financial war is waged against our country, we are forced to react, while still fulfilling all our obligations,” Siluanov said. “If we are not allowed to do it in foreign currency, we’ll do it in rubles.”
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