14 Mar 2022 14:34

Eurobond coupon payment in rubles will be fulfillment of obligations, payment in FX does not depend on RF - Siluanov

MOSCOW. March 14 (Interfax) - Russia has prepared instructions to pay the sovereign Eurobond coupon due on March 16 and will do so in rubles if foreign banks are unable to effect the payment due to Russia's international reserves being frozen, Finance Minister Anton Siluanov told the Russia 24 TV channel.

In present conditions such a payment will be considered to be the fulfillment of obligations on the borrower's part, he said when asked whether a payment in rubles would be considered to be default.

"This week we are going to pay the next coupon on the Eurobonds. We have to pay this coupon on Wednesday. And today, on Monday, we have already prepared a payment order denominated in foreign currency. Accordingly, we will give such an order to our Western banks so that this payment order is executed. We will monitor the progress of this payment, and we will monitor in detail how the banks will execute our orders. Yes, of course, in conditions when Russia's gold and foreign currency reserves are frozen - most of them are in the reserve currencies, we are talking about dollars, euros, yen, and pounds - then the execution of a payment in these currencies when the gold and foreign currency reserves are frozen may encounter certain difficulties. Nevertheless, it will depend on the ability of those banks, which are western banks, where Russian accounts are located, to execute this order," Siluanov said.

"If we see difficulties with the execution of this order, then tomorrow, on Tuesday, we will prepare a corresponding payment order in ruble equivalent. In accordance with the presidential decree, we have such a scenario in case the payment is not executed in foreign currency. Tomorrow we will prepare a corresponding execution of our obligations in rubles. These funds will also be credited to specially opened accounts in ruble equivalents and these payments will be executed if these ruble funds are converted into foreign currency. If our Western partners are not able to carry out such conversion, the funds will be executed in the currency in which we carry it out," the minister said.

"Is this a default or not? We are fulfilling our obligations, but those countries that have essentially defaulted on their obligations by freezing gold and foreign currency reserves are making it difficult for us to fulfill our obligations. Therefore, we are fulfilling our obligations from the point of view of Russia. The issue of writing off these funds from our currency accounts, which are not in our jurisdictions and for which there was a decision to suspend operations by Western countries," Siluanov said.