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Russia exports reserve dollars to pay for bonds to prevent defaults

Russia prevents the situation Originally through last-minute payments using U.S. dollar reserves outside the country, Treasury Department officials said.

Earlier it was reported that Russia’s maturing bonds belonged to bank JPMorgan Chase.

At the time, strict Russia sanctions prevented this payment from being accepted, so Moscow attempted to make the payment ruble.

The Kremlin has repeatedly affirmed its financial capacity and willingness to continue paying its debts. The Kremlin has argued that unusual events give it a legal basis to pay in Russian rubles instead of dollars or euros.

However, investors and rating agencies disagree and expect Russia to convert the ruble into dollars before the grace period ends next week, prompting speculation that Russia will take the lead. historical debt.

The agency that manages credit default swaps (CDS) — insurance policies designed to protect against defaults — has determined that Russia is in default.

An unnamed US Treasury Department official said on April 29 Russia tapped its foreign exchange reserves outside the country to make payments. Since the United States imposed sanctions on Russia’s central bank right at the start of the war in Ukraine, Russia has only been able to use the new revenues from activities such as selling oil and gas or existing foreign exchange reserves abroad.

Russia’s Treasury Ministry said it made the payments at a London office of Citigroup. A Citi spokesman declined to comment on whether the bank processed the transaction.

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