27 June, 03:28 PM

Kremlin ‘disagrees’ with claims it has defaulted on foreign sovereign debt, says spokesman

The Kremlin "disagrees" with the recent media reports that Russia has entered default on its foreign currency-denominated sovereign debt, Russian news agency Interfax quoted Russian dictator Vladimir Putin's spokesman Dmitry Peskov as saying on June 27.

Earlier today, the Bloomberg news agency reported that Russia had gone into default on its foreign currency-denominated sovereign debt for the first time since 1918, as Western sanctions cut the Russian Finance Ministry's access to foreign currency with which to pay its creditors

According to the agency, at midnight on June 27, Russia missed the last day of a grace period to transact an interest payment of U.S. $100 million to bondholders, and this event triggered a default.

Asked whether the Kremlin agreed with the relevant default statements, Peskov said: "No, we do not agree."

He said that the allegations of default, in this case, were allegedly "absolutely illegal, because the required payment in foreign currency was made in May."

"The fact that these funds were withheld and not brought to the recipients is no longer our problem," Peskov said.

According to the spokesman, "there is no reason to call this situation a default in this case."

Earlier on June 23, Russian dictator Vladimir Putin signed a decree ordering debt and interest payments to be paid off in Russian rubles, but creditors refused to accept payments in Russian currency.

The Russian Finance Ministry has used all the dollars and euros it could access to settle bond payments since the introduction of Western sanctions while making a regular effort to persuade bondholders to accept payments in rubles.

On May 25, the U.S. administration revoked the Russian Finance Ministry's license to conduct any actions involving bonds on the U.S. financial markets, including payments to creditors.

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