Russia exports reserve dollars to pay for bonds to prevent default

Amount Russia Last-minute bond payments in dollars were undisclosed, AP reported.

However, in early April, the Russian Ministry of Finance confirmed that it was seeking to make a payment of $ 649 million due on April 6 with two bonds to an unnamed US bank.

Previously, it was reported that the maturity bonds of Russia belonged to JPMorgan Chase bank.

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

The Kremlin has repeatedly asserted 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, leading to speculation that Russia is leading the way. historical debt.

The agency that administers credit default swaps (CDSs) – insurance policies designed to protect against default – has determined that Russia has defaulted.

An unnamed US Treasury official revealed that Russia tapped its foreign currency reserves outside the country to make payments on April 29. Since the United States sanctioned Russia’s Central Bank at the very beginning of the war in Ukraine, Russia has only been able to use the new revenue that comes from activities such as selling oil and gas or existing foreign currency reserves outside the country.

The Russian Finance Ministry said it had made the payments at a London branch of Citigroup. A Citi spokesperson declined to comment on whether the bank processed the transaction.