On May 4, a Default May Occur in Russia

by Olha Povaliaieva
Tuesday, May 3, 2022
On May 4, a Default May Occur in Russia

As "Bloomberg" confirms, on the fourth day of May, the RF will have a grace period to redeem 2 foreign bonds worth $650 mln

According to Bloomberg, on Wednesday, May 4, 2022, Russia must repay coupon and principal payments for $650 million. A prerequisite is a payment in dollars and not the state currency of the aggressor state. We remind you that in April, Russia attempted to pay for the bonds in rubles.

“A grace period to transfer $650 million coupon and principal payments expire on May 4 after the funds were initially blocked in early April. Russia's foreign debt default in more than a century had looked all but certain until a shock announcement late last week by the Russian Finance Ministry that the cash was finally moving through the financial system,” Bloomberg.

“However, the dollars still have to go through the last stages. As of the afternoon of May 2 in Europe, payments had not yet arrived, at least in one of the clearinghouses. The complications are the result of broad financial and economic sanctions imposed on Russia after its invasion of Ukraine. These include sanctions against some of the country's largest creditors, seizure of assets, and freezing of the country's foreign exchange reserves,” an EU representative shared insider information.

We remind you that JPMorgan Chase & Co has blocked payments for the Russian Federation by order of the United States treasury. Then the countdown to the default of the country of aggression began. Then Russia used the money from the reserve to finance the war against Ukraine and paid off the obligations. According to the latest information, Russia found the funds to pay for the bonds, and investors began to receive money in their accounts.

Today, May 3, Josep Borrell announced the terms of the 6th package of sanctions against Russia: an embargo on Russian oil, measures against financial institutions of the Russian Federation, and subjects of propaganda and disinformation.

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