Russia made what appeared to be a late u-turn to avoid a default on Friday, as it made a number of already-overdue international debt payments in dollars despite previously vowing they would only be paid in roubles.
Whether the money would make it to the United States and other Western countries that sanctioned Russia was still not clear, but it represented another major twist in the game of financial chicken that has developed about a possible default.
Russia's finance ministry said it had managed to pay $564.8 million on a 2022 Eurobond and $84.4 million on a 2042 bond in dollars - the currency specified on the bonds.
The ministry said it had channeled the required funds to the London branch of Citibank, one of the so-called paying agents of the bonds whose job is to disburse them to the investors that originally lent the money to Moscow.
Russia has not had a default of any kind since a financial crash in 1998 and has not seen a major international or 'external' market default since the aftermath of the 1917 Bolshevik revolution.
The risk of another one though is now a flashpoint in the economic tussle with Western countries which have blanketed Russia with sanctions in response to its actions in Ukraine that Moscow has termed a "special military operation".
The bonds were originally supposed to be paid earlier this month but an extra 30-day 'grace period' that government bonds often have in their terms meant Moscow's final deadline was on May 4.
(Reporting by Reuters
Editing by Tomasz Janowski)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU