Despite the tense relationship with the West, Russia continues to pay interest on government bonds that are due – not in dollars or euros, but in rubles. Interest on two bonds (Eurobonds) due in 2027 and 2047 was paid today, the Ministry of Finance announced in Moscow. The interest, equivalent to 235 million US dollars, was sent to the Russian payment agency NSD, it said. The ministry said the payment was complete.
The problem, however, is that the payments from there can hardly be forwarded to Western payment offices and thus ultimately to Western creditors, since the NSD is subject to Western financial sanctions because of the Ukraine war.
Russia has therefore set up a new procedure in which the creditors have to prove the ownership of the bonds to the NSD. After that, the interest should be able to be passed on. However, due to Western sanctions, it is unclear whether the procedure will work.
It is also currently questionable when one can speak of a payment default with possible further consequences in the direction of a state bankruptcy. Because while Russia wants to service its debts and could do so given the existing reserves, the financial sanctions of the West stand in the way. The payment in the Russian national currency ruble is also disputed.
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