Moscow must pay 117 million interest or violating its debt on Wednesday.
The Russian economy is in a difficult narrow, on Wednesday, faces the first payment of US dollar bonds invaded Ukraine this year. Moscow is due to paying 117 million US dollars, a sovereign link or violation of contracts for a value of US $ 2. Regarding the Russian attack in Ukraine, unleashed the international condemnation of the main financial contours. The United States, the European Union and allies have strong sanctions in Moscow. The fine brings more than half of the central bank of $ 10 billion in assets, and roll the spiral spiral of the 35% ruble, and resists the dollar. Hundreds of Western companies also have a company in the country.
He inherited a short answer.
What is Russia to have the obligation to pay ? On Wednesday, Russia will reach $ 117 million in dollar bonuses. The coupons are the first. Another 615 m expires later this month. So, what if Russia does not pay? A 30-day concession period is awarded in these specific bonds. If Moscow does not pay, the credit rating agency may think that the violation of the contract will begin negotiations. However, the Russian economy is not too high, and more and more negotiations do not seem high.
Why does not Russia have payments? Since the Western announced the sanctions, the ruble has lost about a third of the value. Some bonuses issued by Russia have a term that allows rubles, but interest payments on Wednesday do not meet the conditions.
must pay with US dollars, and given the value of its currency, this is a high order. What happens if Russia pays in RUBLO? The government can try to cover the contract. This is a way to pay you in RUBLO, it is not worth paying.
But wait, Russia has been trimmed with many financial mechanisms, and can you even pay ? Yes, US Office Control of US Assets UU has authorized the transaction exemption from US people at the receipt of debt or fair interest, dividend or payment term. What happens if Russia does not pay? Debt breach can launch a small foreign investor in Russia to launch a country and yet further.
If the default government, the company can follow. Is this what you have seen before? According to the strategic economist and Senior Gerard Dippo, it is equivalent to Argentina 2020.
“The big area here is that investors did not expect to be shocked by three or three months, and in Argentina, you can see the construction of the establishment of the problem. So this is an unprecedented ? a lot of. Economists can usually predict a large number of crisis. Usually, there is a red flag. But you can’t predict that many people [this]. This is a real estate substance event, followed by mass sanctions, a rocking economy, the potential of debt violation, Dipo explained. Who holds a bonus? Russian bonds are maintained by institutional investors, covering funds and company’s pension funds. So what do they have? The bonus can still negotiate in the secondary market, and currently marketing about 20 cents per US dollar.
The problem is whether they will recover their money, and if they will end. The prices of the bonuses reflect these expectations, Dippo tells Al Jazeera. Do you think the United States and its ally believe that sanctions will make Russians pay the debt? I will think that they realize the effects of effectively freezing the Bank of Russia to obtain the capabilities of dollars and euros of euros and other important currencies.
What is the effect of debt breach? The Russians are affected mainly by the depreciation of the ruble and its plug. If Russia will not pay debt, foreign investors will become more doubted to carry out business. RUBLO will suffer. If the Russian government’s default Americans and the default debt of the company The pension is usually small for emerging market debts, as well as any reasonable fund manager, especially if the administration pension will not invest in any emerging market, then it will tell Al Jazera.
How do you see Russian debt? The Russian government does not really have the debt. Its Russian strategy of partial strength is to establish a balance of Moscow, mainly currency reserves and some gold, then maintain a low level of debt. Russia’s internal debt represents 13% of GDP. External debt is 150 billion US dollars, only $ 45 billion, truly owned by the Russian government.
Most is Russian companies and Russian banks, Dippobo tells Al Jazera. How about Russia? The biggest unique company owes debt is a Gazprom oil giant, but Russian oil and natural gas departments have been isolated from Western sanctions. Even so, the Russian is difficult to sell its oil, except for the concerns about how to guide the sanctions.