Russia has made many overdue or late interest payments in dollars on its overseas bonds. Previously, the country vowed to pay only in rubles as long as its reserves remained frozen. Russia has $40bn international bonds amid the flow of Western sanctions. In less than a month the speculation about the country’s default raises, especially when the U.S. allows Moscow to pay when the due is expired and late.
Russia’s ministry of finance had struggled to pay $564.8m interest on the 2022 Eurobond. Then the country promised to pay $84.4m on another 2024 bond in dollars. A senior U.S. official argued that Moscow has paid without using reserves frozen in the United States. So the exact origin of the funds was uncertain.
Wally Adeyemo, the deputy U.S. The Treasury Secretary said to Reuters that the payments siphoned funds away from Russia’s invasion effort. It was the sign of success for U.S. sanctions policy. He refused to give comments on the future of a Treasury general license due to expire on May 25 allowing banks to deal with Russia’s debt payments.
Adeyemo is confident that the goal could starve Russia from the resources that the country is using to escalate the economy and finance for the war. Also, it could stop the invasion of Ukraine. So the Treasury secretary would keep that policy decision in mind. Russia said that the country had channeled the funds to the London branch of Citibank. But Citibank declined to comment.
The Russian Ministry of Finance said that the payments have been paid in the currency of issue of the corresponding Eurobonds. Thus the obligations servicing sovereign Eurobonds are paid. However, two holders of the bonds said they haven’t received the funds.
