Russia said on Friday that it has paid off its US debt in dollars as the country faces Western sanctions for its attack on Ukraine, raising fears of default.
The finance ministry said in a statement that it has paid a total of $650 million for “US dollars, the issuance currency of eurobonds” for the two bonds maturing in 2022 and 2042.
In early April, Moscow had tried to pay off its one-dollar debt in rubles, as the US Treasury Department no longer allowed its debt to be repaid with dollars held in US banks.
As a result, financial rating agency S&P Global Ratings downgraded Russia to “selective default” for foreign currency payments. Foreign currency payments were downgraded to “SD” (the last notch before “D” for default), while the rating for ruble payments remained “CC”.
S&P, on the other hand, stated that it failed to rank Fitch and Moody’s agencies, as well as Russia.
Russia’s Central Bank Governor Elvira Nabioullina reassured the press on Friday that “we can’t talk about default”, although she acknowledged that Moscow is facing “payment difficulties”.
Russia defaulted on its domestic debt in rubles during the 1998 financial crisis, but has not paid its foreign debt since 1918, when Bolshevik leader Vladimir Lenin refused to recognize the debt inherited from the tsarist regime that was overthrown in the 1917 revolution.
source: Noticias
