Kremlin will take legal action if Russia pushed into default, minister threatens
Russia’s finance minister has said the Kremlin will take legal action if the west tries to force it to default on its sovereign debt as part of sanctions placed on the country after Vladimir Putin’s invasion of Ukraine.
In comments hitting back against US, UK and EU-led sanctions, Anton Siluanov told the pro-Kremlin Izvestia newspaper that Russia had taken “all the necessary steps” to pay its international creditors.
In response to sweeping financial sanctions imposed on Russian banks since the war in Ukraine began, the Kremlin has said it would pay holders of its dollar-denominated bonds in roubles. However, many investors would view this as a form of default, a situation in which governments are unable to keep up their debt payments.
Siluanov suggested Russia could go to court to argue that the terms of its repayments had been met, without saying where such a hearing could happen. “Of course we will sue, because we have taken all the necessary steps to ensure that investors receive their payments,” he said.
“We will present in court our bills confirming our efforts to pay both in foreign currency and in roubles. It will not be an easy process. We will have to very actively prove our case, despite all the difficulties,” he added.
The credit ratings agency Standard & Poor’s said last week that it believed Russia had made debt payments on its US dollar-denominated bonds in roubles when payments were due on 4 April. It had been due to make a payment of $649m (£498m) to holders of two of its sovereign bonds, although it was blocked from doing so by US sanctions preventing Russia from using dollars to service its debts.
Investors are not expected to be able to convert those payments into dollars equivalent to the original amounts
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