Russia faces its first external sovereign default in more than a century after it made arrangements to make an international bond repayment in rubles last week
It had been due on April 4 to make a payment of $649-million to holders of two of its sovereign bonds, but the U.S. Treasury blocked the transfer, preventing Russia from using any of its frozen foreign currency reserves to service its debt.
Siluanov did not elaborate on Russia’s legal options and did not say where any court hearing could happen. Siluanov said Russia’s external liabilities amount to about 20 per cent of the total public debt, which stood at about 21 trillion rubles . Of that, about 4.5-4.7 trillion rubles were external liabilities.
The key question is whether Russian assets previously frozen by Western countries, such as nearly a half of Russia’s $640-billion in gold and foreign exchange reserves, could be claimed by creditors following the default, said Artur Starikov, a partner with Capital Law Office.
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