Illustration: Eniola Odetunde/Axios
Russia’s status with its creditors is turning into a matter of he said/she said.
Why it matters: A default by the Russian government on its bond payments would cement its status as an outsider of the global financial system.
- It could also cause even more losses for investors holding bonds currently worth pennies on the dollar.
State of play: Russia's Finance Ministry said that it had made good on the required interest payments due Wednesday on its dollar-denominated bonds, Reuters reports.
- That’s after Russia’s finance minister, Anton Siluanov, told state media on Wednesday that the payments might not go through because of U.S. sanctions, the WSJ reported. “We have the money, we paid the payment, now the ball is on the side, first of all, of the American authorities,” Siluanov said, according to the report.
On the flip side: A Europe-based holder of Russia’s dollar bonds told Reuters that some holders of the bonds still hadn’t received the payment.
- And the Treasury Department insists that sanctions won’t prevent the funds from being transferred. “U.S. sanctions on Russia do not prohibit Russia from making these debt payments,” a Treasury spokesperson told Axios.
The backstory: The sanctions targeted Russian banks, and froze a huge chunk of Russia’s foreign currency reserves — so, both its willingness, and ability, to transfer payments to foreign creditors has been in doubt.
What’s next: If the payments aren’t delivered, Russia still has a 30-day grace period before it’s officially considered in default.