Russia made default - Bloomberg

Russia made a default on sovereign duty in foreign currency for the first time in a century, writes Bloomberg. Earlier, the Ministry of Finance of the Russian Federation announced the payment of debt in rubles that Western countries consider the currency to be inconsistent.

On June 26, a grace period for the payment of about $ 100 million payments for government bonds expired.

“Russia made a default on sovereign duty in foreign currency for the first time in a century, which has become the culmination of toughened Western sanctions that overwhelmed the ways of payment to foreign creditors,” writes Bloomberg.

In May, the US Treasury refused to extend the license, which allows Russia to make payments to serve external debt in dollars.

After that, the Ministry of Finance of Russia said that he was going to pay for bonds and bonds in rubles. Western countries considered this an inconsistent change in the payment currency, saying that they were preparing to declare a default.

On June 23, the Minister of Finance of the Russian Federation Anton Siluanov said that Russia could not use the backup currencies provided for in the issue documentation for payments on sovereign Eurobonds due to restrictions, it is possible to bring payments now only in rubles.

The Ministry of Finance made coupons for two issues of dollar Eurobonds of the Russian Federation in rubles-these are Russian-2027 and Russia-2047 issues, Interfax reported .

Siluanov emphasized that payment in rubles is not a default. In his opinion, the EU and the United States specially create obstacles for Russia's payments to hang the default label on the country.

“But everyone who understands is understood that this is not default,” Kommersant quoted the head of the Ministry of Finance.

The Bloomberg agency in its article notes that the main question is what investors will do. But they can wait for the softening of sanctions, as payments will become invalid only after three years.

Defolt will not change little for Russians who, we quote, "experience two -digit inflation and the worst economic decline in recent years."