Finance Ministry approves new order of paying on Eurobonds

MOSCOW/PETROPAVLOVSK-KAMCHATSKY, Mar 14 (PRIME) -- The Finance Ministry has approved a new temporary order for Russia to pay on its sovereign debt and Eurobonds in foreign currencies, Moscow will fulfill all liabilities on time and in full, the authority said in a statement on Monday.

In order to fulfill liabilities on Eurobonds, the ministry will issue orders to agent banks to carry out payments in the currencies and dates stipulated by the Eurobond documents, while actual implementation of payments will depend on the sanction restrictions and capability of the Russian government and the central bank to use the funds of their foreign currency accounts.

If a foreign correspondent bank fails to fulfill the order on Eurobonds, the order should be recalled. The ministry will pay in rubles using the exchange rate of the central bank as of the date of the payment.

The Russian residents will be able to transfer foreign currency abroad to finance their subsidiaries and representation offices, but the amount of the transferred funds should not exceed the amount of financing for the previous year. They are also allowed to put foreign currency they received as payment from employers or income from rent, coupons and dividends on accounts of individuals with foreign banks.

Finance Minister Anton Siluanov said as quoted by the ministry that Russia has enough money to service its sovereign debt.

“We have enough funds to service our liabilities. We can consider the freezing of foreign currency accounts of the Bank of Russia and the Russian government as a wish of some foreign countries to create an artificial default that has no real economic grounds,” he said.

He said during a TV show aired by Rossiya 1 television channel on March 13 that the West had frozen about 50% of Russia’s foreign exchange and gold reserves, or around $300 billion. It creates problems for the country in servicing its liabilities. Moscow has never refused to fulfill them, and it will pay in rubles for as long as the reserves remain frozen, he said.

The West is also exerting pressure on China so that Beijing restricts Russia’s access to a part of its reserves that is nominated in the Chinese yuan, but the partnership that the two countries created should prevent that from happening, he said.

The Russian banks are now in a tough spot, but their capital reserves allow them to continue working even under the toughest sanctions, he said.

Russia also has enough reserves to ensure production of all the necessary goods and handling of all the necessary settlements, he said, adding that the government would even continue raising pension payments so that the current circumstances don’t hurt pensioners.

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