Russia threatens to repay foreign debt in rubles; Ukraine’s GDP ‘could shrink by a third’ – Business Live

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Russia Days before a major interest payment on its external debt, it is taking steps to make international bondholders pay in rubles instead of dollars, a move that could make a loan default more likely.

Russia’s finance ministry said on Monday it had approved a tentative process to repay foreign currency loans, but warned that payments would be made in rubles if sanctions prevent banks from honoring loans in the currency of issuance. Huh.

Finance Minister Anton Siluanov Said in a statement:

“The claims that Russia cannot meet its sovereign debt obligations are untrue,”

“We have the money we need to meet our obligations.”

Paying Eurobond repayments in rubles could be tantamount to a default, with Siluanov accusing Western countries of trying to orchestrate such a move.

“The freezing of foreign currency accounts of the central bank and the government can be seen as the desire of many Western countries to settle artificial defaults.”

Moscow is due to pay a combined $117 million in interest on the two dollar-denominated bonds this Wednesday, though it has a 30-day grace period to make payments.

The cost of insuring Russia’s debt against default has risen since Ukraine Wars, as traders speculate, could trigger these insurance contracts if the payment is made in rubles, or not at all.

Tomorrow, IMF chief Kristalina Georgieva warned that a Russian default was no longer “impossible”, as Western sanctions meant Moscow could not use much of its foreign exchange reserves.

Georgieva told CBS’s Face the Nation program,

“In terms of meeting debt obligations, I can say that we no longer think of Russian default as an impossible event. Russia has money to pay off its debt, but cannot achieve it.

What I am more concerned about is that there are consequences that go beyond Ukraine and Russia. ,

According to Siluanov yesterday, foreign sanctions have blocked nearly $300bn of Russia’s $640bn in gold and foreign exchange reserves,

Eurozone finance ministers will discuss The economic consequences of the war in Ukraine today The recovery is likely to be affected by the rise in energy and commodity prices at the regular meeting of the Eurogroup.

European markets are set to open rapidly.

China shares tumble, CSI falls 3% after 300 Government shuts down Shenzhen in an effort to contain Covid outbreakAnd investors are concerned about Beijing’s close ties with Russia.

work schedule

• 9.30am GMT: Changes in the basket of goods and services UK consumer price inflation for 2022
• 12.30 pm: Arrival for Eurogroup meeting in Brussels
• 3.30 a.m. GMT: IMF to issue staff report on Ukraine