Kremlin denies Russia debt default

MOSCOW/NEW YORK – The Kremlin insisted Monday there were “no grounds” to say that Russia had defaulted on its foreign-currency sovereign debt as the West pummels Russia with sanctions over its Ukraine offensive.”There are no grounds to call this situation a default,” Kremlin spokesman Dmitry Peskov told reporters after a key payment deadline expired Sunday. “These claims about default, they are absolutely wrong,” he said, adding that Russia settled the debt in May.Bloomberg News reported earlier Monday that Russia defaulted on its foreign-currency sovereign debt for the first time in more than a century, after the grace period on some $100 million of interest payments due Sunday had expired. “This morning’s news around the finding of Russia’s default, for the first time in more than a century, situates just how strong the reactions are that the US, along with allies and partners, have taken, as well as how dramatic the impact has been on Russia’s economy,” a senior administration official said on the sidelines of a G7 summit in Germany.

Russia denied it was in default, saying the payments had been made, in dollars and euros, on May 27 and the money was stuck with Euroclear, a settlement house based in Belgium.

The historic default had been widely anticipated after half Russia’s foreign reserves were frozen and the US Treasury ended a carve-out from sanctions that had allowed US bondholders to be repaid by Russia.

 

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