Russia faces payment of first debt installment since Ukraine invasion
Ruble banknotes and coins, the Russian currency.
(Drawing).
AFP - KIRILL KUDRYAVTSEV
Text by: RFI Follow
2 mins
This Wednesday, March 16 marks the first deadline for Russia in the context of the payment of its debt, after the invasion of Ukraine.
How will the country honor, or not, this first payment of 117 million dollars to its creditors?
If he pays in roubles, which Vladimir Putin wants, a debt denominated in dollars, the country will
de facto
be in default.
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On Monday, March 14, the Kremlin accused foreign countries of creating an artificial situation of
default
due to the sanctions that weigh on the country.
The reserves held abroad, about 300 billion dollars, are indeed frozen, but the country has ample means to pay.
Russia's currency reserves amount to more than 600 billion dollars, half of which is held abroad.
The country also has a gold reserve of 137 billion euros and a sovereign fund which is estimated between 170 and 200 billion dollars.
Two billion dollars to be repaid in April
For two decades and especially since the 2014 crisis, Moscow has indeed tried to build up an irreproachable financial health, a payment default would therefore be an unprecedented situation for a country which is not in difficulty.
And the consequences, in the long term, disastrous for Russia: many countries would refuse to lend it money again and the country would be banned from the financial markets.
During the last default in 1998, it took twelve years for Russia to return to borrow on the markets.
The moment of truth for Russia will surely be next April 4 when it will have to repay a new loan, this one a bond, for an amount of two billion dollars.
Russia has what it takes
Marc Touati, economist, and Founding President of ACDEFI
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To read also:
Economic sanctions: Russia is preparing for a payment default
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Economy
Russia
Ukraine