The government of Vladimir Putin was able to dodge the suspension of payments by satisfying the 117 million dollars in foreign debt interest (two eurobond coupons) that were due last Wednesday thanks to the foreign exchange reserves has accumulated in recent years.
The Russian Ministry of Finance announced this Thursday that on March 14 it sent the funds to a “foreign bank”. As explained by the France Presse agency, the Russian Central Bank sent the payment to the US entity JPMorgan. This firm consulted with the US authorities to ensure that the sanctions imposed on Moscow for the invasion of Ukraine were not violated and, after receiving the green light, sent the money to Citi Group. This last bank has been in charge of distributing the sums required to the holders of the Eurobonds.
Moscow has been stockpiling foreign currency for almost 10 years to protect itself from the “impact of far-reaching sanctions and avoid the fiscal shock that occurred in 2014”, when it suffered sanctions for the annexation of the peninsula of crimea and the start of the war in donbasin eastern Ukraine, Maria Shagina, an expert in sanctions and energy security, explained to EL PERIÓDICO in January.
This measure is part of the economic strength that the Kremlin has built and that also includes the de-dollarization of its economy and the reduction of its dependence on foreign financing.
According to the monthly statement for January of the Bank of Russia, reserves in foreign currency or gold amounted to 630,627 million dollars. Although the Western economic retaliation undertaken so far keeps at least half of this amount frozen.
Interest payments due on March 16 have been the first that Russia will have to face in the coming weeks. This March, you will have to pay 615 million dollars more. On April 4, he faces the expiration of a $2 billion bond.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.