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Russia, facing default risks, says will do all possible to pay creditors – Metro US

Russia, facing default risks, says will do all possible to pay creditors

Russian Finance Minister Siluanov delivers a speech during a session
Russian Finance Minister Siluanov delivers a speech during a session of the lower house of parliament in Moscow

(Reuters) – Russia will do everything to make sure its creditors receive their money, Finance Minister Anton Siluanov said on Thursday, a day after the country edged closer to a potential default on its international debt.

Having managed to service its debt in foreign currency since the beginning of what Moscow calls “a special military operation” in Ukraine on Feb. 24, Russia has encountered difficulties with foreign exchange payments on its Eurobonds.

On Wednesday, Russia said it had to pay roubles to holders of its dollar-denominated Eurobonds maturing in 2022 and 2042 as a foreign bank had refused to process an order to pay $649 million to holders of its sovereign debt.

“We will do everything so creditors receive their invested money from the Russian Federation,” TASS news agency quoted Siluanov as saying.

Siluanov said state-run monopoly Russian Railways (RZhD) was not allowed to pay dollars on its Eurobonds and the company will pay roubles instead, according to Interfax news agency.

“Nevertheless, obligations will be fulfilled: as the Russian Federation, RZhD will do it in roubles,” Siluanov told reporters, Interfax reported.

Russia has not defaulted on its external debt since reneging on payments due after the 1917 Bolshevik Revolution, but its bonds have become a flashpoint in the diplomatic crisis over Ukraine and sanctions tit-for-tat between Moscow and Western capitals.

Siluanov also said his ministry would recommend banks to pay no dividends on their 2021 financial results, according to Interfax.

(Reporting by Reuters; Editing by Mark Heinrich and Emelia Sithole-Matarise)

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