Russia blame West of seeking ‘artificial default’ over Ukraine conflict

Russia’s finance ministry says that other countries are trying to make Russia default on its debts by imposing new sanctions over its war in Ukraine. It says it will pay its debts.

In a statement on Monday, Finance Minister Anton Siluanov said that the freezing of foreign currency accounts at the Bank of Russia and the Russian government could be seen as a move by a number of other countries to make Russia default on its debts without any real reason.

It was last week that the ratings agency Fitch downgraded Russia’s sovereign debt rating even more. It said the move shows that a default is “imminent.”

On Wednesday, the government will pay $117 million on two of its dollar-denominated bonds.

Siluanov said that claims that Russia can’t pay its debts aren’t true. “We have enough money to pay our debts.”

They said they had approved a short-term plan to let banks make payments in foreign currencies, but they said the chances of those payments going through would depend on sanctions.

Several Russian banks have been banned from the SWIFT international payments network, which makes it more difficult to move money outside of the country.

According to Siluanov, if payments aren’t possible, Russia “is ready to make payments in roubles” at the exchange rate set by Russia’s central bank when they are due. This includes its Eurobonds, which were sold since 2018.

Russia’s banking and financial system were hit hard by Western sanctions because of its war in Ukraine. A large part of Russia’s foreign currency reserves were frozen.

Russia has made more efforts to keep money from leaving the country and to support the rouble, which has already lost a lot of value against the US dollar.