Russia makes last-minute bond payment to avoid default

Apr 29, 2022, 2:57 PM | Updated: Apr 30, 2022, 4:58 am
FILE - Youth ride scooters in Manezhnaya Square near Red Square and the Kremlin after sunset in Mos...

FILE - Youth ride scooters in Manezhnaya Square near Red Square and the Kremlin after sunset in Moscow, Russia, on April 20, 2022. Russia staved off a default on its debt Friday, April 29, 2022, by making a last-minute payment using its precious dollar reserves sitting outside the country, U.S. Treasury officials said. (AP Photo/Alexander Zemlianichenko, File)

(AP Photo/Alexander Zemlianichenko, File)

NEW YORK (AP) — Russia staved off a default on its debt Friday by making a last-minute payment using its precious dollar reserves sitting outside the country, U.S. Treasury officials said.

The amount of the payment was not disclosed, but earlier this month Russia’s finance ministry said it tried to make a $649 million payment due April 6 toward two bonds to an unnamed U.S. bank — previously reported as JPMorgan Chase.

At that time, tightened sanctions imposed for Russia’s invasion of Ukraine prevented the payment from being accepted, so Moscow attempted to make the debt payment in rubles. The Kremlin, which repeatedly said it was financially able and willing to continue to pay on its debts, had argued that extraordinary events gave them the legal footing to pay in rubles, instead of dollars or euros.

Investors and rating agencies, however, disagreed and did not expect Russia to be able to convert the rubles into dollars before a 30-day grace period expired next week, leading to speculation that Moscow was heading toward an historic default on its debt.

Russia has not defaulted on its foreign debts since the Bolshevik Revolution in 1917, when the collapse of the Russian Empire led to the creation of the Soviet Union. The governing body over credit default swamps — insurance contracts designed to protect against default — had ruled already that Russia was in default.

Treasury officials, who declined to be named because they weren’t authorized to speak on the record, said Russia tapped into its foreign currency reserves currently sitting outside the country to make Friday’s payment. Since the U.S. sanctioned Russia’s Central Bank early in the conflict, Russia had only the ability to either use fresh revenues coming from activities like oil and gas sales, or existing foreign currency reserves sitting outside the country.

The U.S. has been attempting to force Russia to use its foreign currency reserves — or any revenue from oil and gas sales — in order to deplete the country’s financial resources.

The Russian Finance Ministry said it made the payments at a London branch of Citigroup. A spokeswoman for Citi declined to comment whether the bank had processed that transaction.

___

Hussein reported from Washington.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

FILE - Former President Donald Trump speaks at the Road to Majority conference Friday, June 17, 202...
Associated Press

Giuliani, Graham testimony sought in Trump election probe

ATLANTA (AP) — The Georgia prosecutor investigating the conduct of former President Donald Trump and his allies after the 2020 election is trying to compel U.S. Sen. Lindsey Graham, former New York Mayor Rudy Giuliani, and other members of Trump’s campaign legal team to testify before a special grand jury. Fulton County District Attorney Fani […]
13 hours ago
Associated Press

Feds settle suit alleging abuse by men detained after 9/11

WASHINGTON (AP) — The Justice Department settled a decades-old lawsuit on Tuesday filed by a group of men who were rounded up by the government in the weeks after the Sept. 11, 2001 attacks and held in a federal jail in New York in conditions the department’s own watchdog called abusive and harsh. The settlement […]
13 hours ago
Associated Press

Mexico leader to end daylight saving, keep “God’s clock”

MEXICO CITY (AP) — Mexico’s president submitted a bill Tuesday to end daylight saving time, putting an end to the practice of changing clocks twice a year. Health Secretary Jorge Alcocer said Mexico should return to “God’s clock,” or standard time, arguing that setting clocks back or forward damages people’s health. That would mean darkness […]
13 hours ago
This booking photo provided by Pike County, Kentucky, jail shows Lance Storz. Two officers were kil...
Associated Press

Funerals begin for 3 Kentucky officers killed in ambush

Sheriff John Hunt fought back tears while saying goodbye to his longtime friend, William Petry, one of three law enforcement officers killed in an ambush while serving a warrant in eastern Kentucky last week. The small Appalachian county that Hunt is in charge of protecting is reeling from the deaths of the officers, who walked […]
13 hours ago
Italy's Prime Minister Mario Draghi, second left, and Turkey's President Recep Tayyip Erdogan revie...
Associated Press

Turkey to ‘intensify’ negotiations for Ukraine grain deal

ANKARA, Turkey (AP) — Turkish President Recep Tayyip Erdogan said Tuesday he intends to “intensify” negotiations with Russia and Ukraine in the hope of reaching a deal on a U.N. plan to export Ukrainian grain to world markets. Erdogan made the comments during a joint news conference with Italian Premier Mario Draghi. Turkey is working […]
13 hours ago
Associated Press

2 Egyptian peacekeepers killed, 5 others injured in Mali

BAMAKO, Mali (AP) — Two United Nations peacekeepers from Egypt were killed and five others seriously wounded when their vehicle hit a landmine planted by suspected jihadis in northern Mali on Tuesday, the U.N. said. The deadly attack comes just days after the renewal of the mandate of the U.N. Mission to Mali, known as […]
13 hours ago

Sponsored Articles

...
CANVAS ANNUITY

Best retirement savings rates hit 4.30%

Maximize your retirement savings with guaranteed fixed rates up to 4.30%. Did you know there is a financial product that can give you great interest rates as you build your retirement savings and provide you with a paycheck for life once you retire? It might sound too good to be true but it is not; this product is called an annuity.
...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

Update your child’s vaccines before kindergarten

So, your little one starts kindergarten soon. How exciting! You still have a few months before the school year starts, so now’s the time to make sure students-to-be have the vaccines needed to stay safe as they head into a new chapter of life.
...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

ADHS mobile program brings COVID-19 vaccines and boosters to Arizonans

The Arizona Department of Health Services and partner agencies are providing even more widespread availability by making COVID-19 vaccines available in neighborhoods through trusted community partners.
Russia makes last-minute bond payment to avoid default