{"id":81963,"date":"2022-05-05T11:34:17","date_gmt":"2022-05-05T16:34:17","guid":{"rendered":"http:\/\/www.shotinthedark.info\/wp\/?p=81963"},"modified":"2022-05-05T11:34:17","modified_gmt":"2022-05-05T16:34:17","slug":"russia-debt-repayments","status":"publish","type":"post","link":"http:\/\/www.shotinthedark.info\/wp\/?p=81963","title":{"rendered":"Russia debt repayments"},"content":{"rendered":"\n

Russia is spending a fortune in Ukraine, perhaps as much as<\/a> $20 billion a day. In turn though, Europe is sending hundreds of millions<\/a> of euros a day to Russia for hydrocarbons. Putting sanctions on Russia while funding Russia is not a comfortable position. So, the EU is contemplating phasing out<\/a> its dependence on Russian, and that might have enormous implications for Russia’s economy.

Maximilian Hess of the Foreign Policy Research Institute looks at some of those<\/a> implications:<\/p>\n\n\n\n

On April 29, Russia\u2019s finance ministry announced that it would pay some $650m to foreign creditors on two overdue Eurobonds. And by making the payments before the bonds\u2019 grace period expired on May 4, the Kremlin has avoided falling into sovereign default.<\/p>

Ahead of the bond\u2019s formal maturity on April 4, the Kremlin announced that it would buy back the bonds in roubles \u2013 and pay those who refused to accept the rouble buy-back as well. Nearly 75 percent of bondholders (almost certainly all domestic) agreed to the new terms .<\/p>

Russia\u2019s recent decision to pay the bonds in foreign currency enabled it to avoid the all-but-guaranteed acceleration of other debts and lawsuits that would have followed a default and further impoverished the Russian people.<\/p>

However, the move also left the Kremlin in a position of extreme hypocrisy and embarrassment. In the end, what Putin did was to repay domestic bondholders with roubles, which they cannot convert freely into hard currency to spend abroad. And pay foreign holders in full, in dollars \u2013 hardly a feat worthy of praise.
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In case there is any doubt just how exposed the shipping sector is to Western sanctions, one just needs to look to the actions of Russian state-owned shipping company Sovcomflot. On May 3 specialist maritime industry publication Lloyd\u2019s List revealed that Sovcomflot was looking to sell at least 40 ships from its 121 ship fleet before wind-down authorisations expire and it becomes fully sanctioned on May 15.<\/p>

If Sovcomflot fails to raise enough cash to honour its debts before then, it will fall into default and creditors will go after its ships. Just like the Russian state, Russian businesses are still fearful of defaulting on Western creditors \u2013 even amid a war.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Russia is spending a fortune in Ukraine, perhaps as much as $20 billion a day. In turn though, Europe is sending hundreds of millions of euros a day to Russia for hydrocarbons. Putting sanctions on Russia while funding Russia is not a comfortable position. So, the EU is contemplating phasing out its dependence on Russian, […]<\/p>\n","protected":false},"author":273926,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-81963","post","type-post","status-publish","format-standard","hentry","category-world"],"_links":{"self":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/81963","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/users\/273926"}],"replies":[{"embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=81963"}],"version-history":[{"count":2,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/81963\/revisions"}],"predecessor-version":[{"id":81968,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/81963\/revisions\/81968"}],"wp:attachment":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=81963"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=81963"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=81963"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}