Russia near to defaulting on overseas debts, says ratings agency
Russia’s switch to making debt payments in roubles has brought the heavily sanctioned country to the brink of defaulting on its debts, according to a leading credit rating agency.
Heaping further pressure on Vladimir Putin’s beleaguered government, Moody’s said that without a return before 4 May to making payments in dollars as agreed under the terms of Russia’s loans, Moscow could be in default, allowing creditors to claim insurance payouts and tainting the country’s reputation as a reliable counterparty.
The warning by Moody’s of an impending default is expected to be met with an angry response from Putin’s administration, which has denied that the rules governing its loans prevent Russia making interest payments in roubles.
In response to a similar declaration last week by Standard & Poor’s that payments in roubles jeopardised Russia’s status as a borrower, the Kremlin said the west had already defaulted on its obligations by freezing its reserves, and that it wanted a new system to replace the Bretton Woods financial architecture established by western powers in 1944.
Sanctions on Russia since its invasion of Ukraine have prevented the Russian central bank from accessing much of the foreign currency it has amassed in recent years.
Earlier this week, Anton Siluanov told the pro-Kremlin Izvestia newspaper that Russia had taken “all the necessary steps” to pay its international creditors.
Russia’s minister of finance suggested it could go to court to argue that the terms of its repayments had been met. “Of course we will sue, because we have taken all the necessary steps to ensure that investors receive their payments,” he said.
If Moscow is declared in default, it would mark Russia’s first failure to pay interest payments on
Read more on theguardian.com
