• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Russia says it made a payment to avoid default

NWRatCon

Eco**Social Marketeer
DP Veteran
Joined
Mar 6, 2019
Messages
20,932
Reaction score
16,536
Location
PNW
Gender
Male
Political Leaning
Other

Russia says it made a payment to avoid default (CNN)​

"Russia says it has ordered the $117 million in interest payments it owes Wednesday to be sent to investors, attempting to avoid its first international default in more than a century. But it's not out of the woods yet.

That's because the funds the country used to make the debt payments came from Russia's frozen foreign assets, sanctioned because of its attack on Ukraine — so it remains unclear whether investors will receive their money.

Anton Siluanov, Russia's finance minister, told state media Russia Today that the country had made good on its obligations to creditors. But the "possibility or impossibility of fulfilling our obligations in foreign currency does not depend on us," Siluanov said, according to RT, warning that the payment might not go through if the United States disallows it." (Emphasis mine)

In other words, they used a bad check to pay the debt.
 

Rogue Valley

Ruscism = Russian fascism
DP Veteran
Joined
Apr 18, 2013
Messages
85,545
Reaction score
70,820
Location
Barsoom
Gender
Male
Political Leaning
Independent
The Kremlin was forced to use dollars here because the two debt installment payments stipulated payment in dollars. If Russia paid in rubles, that would constitute a technical default. There is an automatic 30 day grace period for these two payments, so we'll have to see if they are processed correctly.

Russia has a different payment coming in April. Many Russian loans can be paid back using rubles no matter the original tender. Always read the fine print.

Yesterday the exchange rate was 118 rubles to the dollar, so a Russian ruble is now worth less than a penny.

The Central Bank may have to devalue the ruble and put price-controls in place. The interest rate is already 20%. The Russian economy is screwed.
 

NWRatCon

Eco**Social Marketeer
DP Veteran
Joined
Mar 6, 2019
Messages
20,932
Reaction score
16,536
Location
PNW
Gender
Male
Political Leaning
Other
The denouement of this circumstance is going to have interesting, and lasting, effects. I agree with the assessment that the Russian economy is screwed. Payments in dollars are getting out of their reach (as are their assets) and payments in rubles are unlikely to be acceptable much longer. They won't get many more loans, and without those, they have no liquidity to function. Russia may succeed in Ukraine, but it will, ultimately, fail.
 

bluesmoke

DP Veteran
Joined
Jun 18, 2016
Messages
22,220
Reaction score
7,941
Gender
Undisclosed
Political Leaning
Undisclosed
Wait'll to avoid default the oligarchs have to kick-in. Heh-heh.
 

NWRatCon

Eco**Social Marketeer
DP Veteran
Joined
Mar 6, 2019
Messages
20,932
Reaction score
16,536
Location
PNW
Gender
Male
Political Leaning
Other
Last edited:
Top Bottom