Ruble mechanism: the Kremlin supported the idea to apply the gas payment scheme to pay off external debt

Russia has the necessary funds to fulfill its obligations and avoid default, said Dmitry Peskov, press secretary of the country's president.

“Our position is well known: there can be no objective reasons for a default.

There is money, and there is a willingness to pay it, whether in rubles or according to a scheme that may be more convenient for paper holders,” the Kremlin spokesman said.

Recall that at the end of February, the United States, the European Union and a number of other countries blocked almost half of Russia's gold and foreign exchange reserves totaling $300 billion. As a result, international rating agencies sharply downgraded Russia's credit rating and warned of the risk of a default in the country.

For a certain time, the United States allowed Moscow to settle its debts in foreign currency, but only with new money, not blocked ones.

However, on May 25, Washington terminated the license that allowed the Russian Federation to pay off American creditors in dollars.

Nevertheless, the Russian authorities declared their readiness to continue fulfilling the state's debt obligations, but only in rubles.

To do this, the country's leadership can use a scheme that has already been tested in the course of gas payments.

“In general, the practice, for example, of the gas payment system (in rubles. -

) has shown its convenience for both sellers and buyers in the current conditions.

Why not use it, only in reverse order?

Peskov said.

Proven Method

A new gas payment mechanism has been launched in Russia since April 1 on behalf of President Vladimir Putin.

After large-scale Western sanctions and partial blocking of reserves, the head of state ordered to accept payment for energy supplies to unfriendly countries only in rubles.

To complete the transaction, foreign buyers must open two special accounts with Gazprombank: in foreign currency and in rubles.

First, the money must be transferred to a foreign currency account, then the bank on the Moscow Exchange will exchange these funds for rubles and credit them to the ruble account.

Immediately after that, the foreign partner will be able to transfer rubles directly to the gas seller.

“The procedure for settling external debt can operate in the same way, but in a different direction.

In order for the investor to be able to receive payment in the original currency, he will need to open foreign currency and ruble accounts in a Russian bank.

In addition, you should receive orders to sell the currency.

The head of the Ministry of Finance, Anton Siluanov, has already stated that the scheme is being finalized, ”Vladislav Antonov, financial analyst at BitRiver, told RT.

According to the chief economist of the TeleTrade information and analytical center Mark Goykhman, the Ministry of Finance will first send the money due to investors in rubles to the National Settlement Depository, which contains information about all holders of Russian debt.

NSD, in turn, will begin distributing the amounts to the ruble accounts of creditors in the bank, after which the funds will be exchanged at the Moscow Exchange and credited to foreign currency accounts.

“This is done initially in such a way that each of the investors receives the strictly required amount due to him for repayment and specified by NSD.

All transactions within the bank take seconds in the electronic system.

After being credited to a foreign currency account, the obligations to the creditor are fulfilled, and he can dispose of the funds in his account, ”added Goykhman.

Countdown

Note that Russia borrows money from other countries through government bonds.

We are talking about the so-called Eurobonds, which are denominated in foreign currency and represent debt obligations guaranteed by the government.

Investors buy securities issued by the Ministry of Finance of the Russian Federation and receive a stable income from them.

Thus, holders of government bonds lend their money to the country's economy.

On May 27, Russia was supposed to pay coupon income on Eurobonds for a total amount of about $100 million, TASS writes.

The Ministry of Finance of the Russian Federation decided to act proactively and fulfilled its obligations on these payments on May 20 - five days before the expiration of the US general license.

At the same time, according to Bloomberg, investors have not received the money intended for them.

Moscow has a little less than a month to bring funds to Eurobond holders.

If after this period Russia does not find a way to solve the problem, the country may face a technical default.

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• © Vladimir Baranov

Default means the borrower's refusal to fulfill its financial obligations.

Russia faced such a situation in 1998.

Then, against the background of a number of economic problems and the complete depletion of the reserves of the Central Bank, the country suspended payments on domestic debts for 90 days.

However, even under these conditions, Moscow continued to fulfill its international obligations.

“Hypothetically, a default on state obligations now does not entail the catastrophic consequences that have been remembered since 1998.

The financial system of the country is in a fairly prosperous state.

A default can lead to drastic restrictions and prohibitions on borrowing in foreign markets.

However, so far this need is not very relevant for Russia,” Mark Goykhman believes.

According to the expert, if a default is recognized, it will be more difficult for Moscow to return to international capital markets even after the lifting of sanctions.

Western countries, in turn, may attempt to seize or confiscate Russian state assets abroad, but there will be no significant consequences for ordinary citizens, the expert is sure.

“It is more likely that a default will be avoided altogether.

The procedure for repaying the state debt that is being discussed now will most likely be adopted by foreign holders of Eurobonds, since they will have the opportunity to receive their money, ”Goykhman believes.

A similar point of view is shared by Vladislav Antonov.

As the specialist recalled, initially a number of Western countries announced their unwillingness to pay for gas in rubles, but in the end, more than half of Gazprom's customers agreed to Moscow's conditions.

A similar development of events is possible in the case of Eurobonds, the analyst believes.

According to him, the United States has chosen a strategy of intimidation and its attempts to organize an artificial default in Russia are to the detriment of American investors.

Such initiatives, together with the freezing of Russian reserves, can seriously undermine confidence in the US financial system in the long term, the expert is sure.

“The business reputation of the United States has already sunk below the plinth.

The states believe that they are the masters of the world and everyone should dance to their tune.

The Joe Biden team, by their actions, showed many countries that the gold reserves of central banks are not protected and can be frozen at any time, ”concluded Antonov.