Russia has all the resources and does not refuse to service its public debt, says ex-Finance Minister, head of the Accounts Chamber Alexei Kudrin. According to him, the situation that has developed in connection with the refusal to renew the license by the US Treasury cannot be considered a default.
Earlier, OFAC (the sanctions enforcement arm of the US Treasury Department) announced that the license, which allowed transactions required to receive payments on Treasury and Bank of Russia debt obligations up to May 25, would not be renewed.
“The Russian Federation has all the resources to pay the public debt. In this sense, all borrowers who work with the Russian Federation could be sure that Russia is willing and ready to pay,” Kudrin told reporters.
“I know that the Ministry of Finance (RF) has gone to create an internal agent who will ensure the payment of debt in rubles to internal, Russian participants, borrowers, which, in my opinion, will solve this problem, thereby resolving the issue in relation to Russian holders of securities papers. But it will make it difficult for foreign participants to obtain these resources, which can only be regretted. Because Russia is ready and willing to do this,” he said.
According to Kudrin, “in this sense, it cannot formally be attributed to the definition of default.” “Because all the resources are there, the desire is there, but they are slowed down or blocked,” Kudrin said.
The Russian Treasury Ministry said on Wednesday that in the absence of a license from the US Treasury that allows payments on external public debt in dollars, Moscow will service it in rubles.
According to the Russian Ministry of Finance, the US Treasury’s decision “primarily infringes on the rights of foreign investors in Russian debt instruments and undermines confidence in Western financial infrastructure.” The Ministry of Finance clarified that the payments will be made in the currency of the Russian Federation with the possibility of their subsequent conversion into the original currency of the obligation through NCO JSC National Settlement Depository (NSD) as a paying agent.
According to Finance Minister Anton Siluanov, the current situation has nothing to do with the situation in 1998, when a default was declared in the Russian Federation due to the fact that Russia did not have enough funds to pay off its debts. “Now there is money, and there is also a willingness to pay. This artificially created situation by an unfriendly country will not affect the quality of life of Russians,” Siluanov assured, whose words were quoted in the Finance Ministry’s statement.