Russia announces payments in dollars
Russia said Friday it had paid off its debts in dollars as the country faced Western sanctions over its invasion of Ukraine, raising fears that Moscow might default, AFP reported.
The Ministry of Finance said in a statement that it made voucher payments totalling up to $650 million on bonds due in 2022 and 2042 "in Eurobonds, i.e. THE US dollar."
In early April, Moscow tried to pay off dollar debt in rubles, as the U.S. Treasury Department no longer allowed it to settle the debt with dollar amounts frozen in U.S. Banks.
Financial rating agency S&P Global Ratings downgraded Russia's foreign currency payment rating to "selective default,"but the ruble maintains a high level after initially declining.
S&P Global Ratings said it had suspended its rating of Russia, as did Fitch Ratings and Moody's.
"We can't talk about default," Central Bank of Russia Governor Ilevera Nabiolina told reporters Friday, acknowledging that Moscow is facing "payment difficulties."
The last time Russia defaulted on its foreign currency debt was in 1918, when Bolshevik revolution leader Vladimir Lenin refused to recognize the obligations of the deposed Tsar's regime.
In 1998, the Russian government defaulted on domestic debt in rubles in the midst of the global financial crisis.
On Thursday, Russia warned the West that there would be a harsh military response to any further attack on Russian territory, accusing the United States and its key European allies of publicly inciting Ukraine to attack Russia, Reuters reported.
The Russian invasion of Ukraine, which began on February 24, has killed thousands, displaced millions, and heightened fears of the most serious confrontation between Russia and the United States since the Cuban missile crisis in 1962.
Two months after the invasion began, Russia has reported, in recent days, what it described as a series of attacks by Ukrainian forces in Russian areas bordering Ukraine, and warned that such attacks threatened a major escalation.
