US poised to block Russia’s debt payments – media

US poised to block Russia’s debt payments – media

The US may block Russia’s ability to make payments on its government debt by the end of May, Bloomberg reported on Tuesday citing people familiar with the matter.

The US Treasury Department’s Office of Foreign Assets Control is reportedly poised to scrap a temporary exemption on Russia’s debt payments once it expires on May 25, in order to boost pressure on Moscow. The waiver was granted after Washington introduced sanctions on Russia in response to the launch of a military operation in neighboring Ukraine, which was highly criticized in the US. This allowed Moscow to make coupon payments even when nearly all other financial transactions were banned. Scrapping the exemption would effectively put a block on Russian payments to US investors.

Moscow’s inability to meet its debt obligations could be viewed as a default, analysts say, albeit an “artificial” one, as the country remains financially capable of paying but would be prevented by sanctions from doing so.

Russia has made all of its scheduled payments to creditors so far, and officials have repeatedly stated that it is equipped to continue doing so in the future.However, it is currently unclear how payments can continue being made if the US exemption is allowed to lapse.

According to Bloomberg sources, some Treasury officials believe that Russia should be allowed to pay its debt because it would drain the country’s foreign-currency reserves and thus force it to redirect the funds it could otherwise spend on the ongoing military operation in Ukraine. But analysts say that Russia’s debt payments are a drop in the bucket compared to its profits from exports of oil, gas and other commodities. According to analysts from Statista, Russia’s government debt was $65 billion as of December 2021, while the value of its exports amounted to nearly $276 billion.

Russia is next due to make a debt payment on May 27, which will be on foreign bonds maturing in 2026 and 2036. Overall, the country is facing more than $490 million in foreign-currency bond payments by the end of June.

Carlos de Sousa, an investor at Vontobel Asset Management in Zurich, told Bloomberg that Russia is very likely to default on its obligations, but this would hardly be a significant development.

“It continues to be our baseline scenario that a default will happen… I don’t know why the US would renew the carve-out. Russian sovereign debt is very low, they still have resources and some money flowing in. So for them to continue to service the debt is not too onerous. The Russian government just wants to keep the reputation,” he stated.

Russia has recently accused the US of trying to engineer an artificial default by blocking payments, since the country is willing to pay its debt and has the resources to do so. The Kremlin has described the situation as a default of the Western financial system, due to its failure to fulfill its financial obligations to Russia.

For more stories on economy & finance visit RT's business section

Source: www.rt.com

The last notes - Экономика

most read news

#Экономика

Russia has huge natural gas reserves that could last for more than a century, the head of state-owned Gazprom, Alexey Miller, said on Wednesday at the International Business Congress. “Our consumers,
подробнее...

Japanese automaker Toyota has decided to shut down its plant in St. Petersburg, Russia's Ministry of Industry and Trade said in a statement on Friday.The company vowed to fulfill all of its social
подробнее...

Electricity prices in Germany are expected to jump to record highs next year, the Neue Osnabrucker Zeitung newspaper reported on Friday, citing the country’s local public utilities association
подробнее...

The finance ministers of the Group of Seven influential nations announced on Friday their intention to ban maritime services transporting Russian oil if its price is not approved by ‘international
подробнее...

One in six Italians, or up to nine million people, could sink into energy poverty due to soaring bills across the EU, Italy’s ANSA news agency reported on Saturday, citing the Italian General
подробнее...

The Russian budget will be in deficit from 2023 to 2025, Prime Minister Mikhail Mishustin said at a government meeting on Thursday.“During the entire period, the budget will be in deficit, the main
подробнее...

Washington has imposed restrictions on the sale of certain high-tech computer chips to Russia and China, a number of US media outlets reported on Thursday, citing two major US chipmakers, Nvidia and
подробнее...

The Central Bank of Russia (CBR) is considering creating a compensation fund for local investors whose assets have been frozen by Western nations, Governor Elvira Nabiullina said on Thursday during
подробнее...

The German government will take control of Securing Energy for Europe (SEFE), formerly Gazprom Germania, a subsidiary of Russian energy giant Gazprom, Der Spiegel reported on Thursday, citing its
подробнее...

Nicaragua is ready to explore the use of the Mir payment system, developed by Moscow in response to Western sanctions, and allow the use of Russian credit and debit cards in the country, its minister
подробнее...

Sri Lankan Transport Minister Bandula Gunawardane on Saturday apologized on the behalf of his country for detaining a Russian plane earlier this year that caused Moscow to suspend flights to the
подробнее...

The Bank of Russia (CBR) is against the legalization of crypto-exchanges, exchangers and settlements in cryptocurrency within the country, RIA Novosti reported on Monday, citing the regulator’s press
подробнее...

One of Russia’s top banks, VTB has become the first lender in the country to launch money transfers to China in yuan, sidestepping the Western-controlled global financial messaging system SWIFT.“The
подробнее...

The share of Russian gas in the European Union market has plummeted from 50% to 9% since the beginning of the current year, French President Emmanuel Macron said on Monday. Russian gas imports by EU
подробнее...

Major European ports have signaled their readiness to facilitate the export of Russian fertilizers, UN Secretary-General Antonio Guterres said in an interview with RIA Novosti, published on
подробнее...

The Moldovan government has launched a special website which will help citizens find firewood to heat their homes, authorities announced this week.“The site provides information about the nearest
подробнее...

The proposal by the EU to place a price cap on Russian natural gas imports is a foolish, non-market-oriented plan that has no future, Russian President Vladimir Putin said on Wednesday.“Faced with
подробнее...

The intense pressure placed on Russia by Western sanctions has forced the country to ramp up efforts to launch new factories and enterprises, according to Executive Director of the Russian-Chinese
подробнее...