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How Russia plans to pay off its foreign debt

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“In order to be paid, the holders of Eurobonds issued by Russia will have to open an account in foreign currency and one in rubles at a Russian bank,” Anton Siluanov told Vedomosti, Agerpres reports.

Last Wednesday, the United States pushed Russia closer to the point of default, by deciding not to extend an exception that allowed US dollar-denominated Russian bondholders to pay in dollars as Washington increases pressure on Moscow over military intervention in Ukraine.

Faced with an unprecedented debt crisis, Russian Finance Minister Anton Siluanov said on Friday that Moscow would continue to repay its foreign debt in rubles, adding that it would defend Russia’s role as a reliable debtor by any means.

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“As in the case of the payment in rubles for natural gas: we are credited in foreign currency, there is an exchange in rubles on behalf of the buyers of gas and this is how the payment is made. The Eurobond settlement mechanism will operate in a similar way, except in the other direction, “Anton Siluanov told Vedomosti.

Thanks to this system, Russia will be able to bypass Western payment infrastructure, and payments will be made through Russia’s central depository, Siluanov added.

Russian President Vladimir Putin has demanded that countries he considers “hostile” pay in rubles for natural gas supplied by Russia, failing which supplies will be cut off. opens an account with the Russian state bank Gazprombank, in which to deposit euros or dollars, and the Russian bank will convert the amounts into rubles.

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