This is the week of truth for Vladimir Putin (69). Not because of the war of aggression in Ukraine. He has recently relocated mainly to the eastern part of the country. It’s about the toughness of the country. Financial collapse threatens Russia!
The countdown has been turned on as two interest payments on government bonds fell last Friday. Russia should have exchanged $ 71 million and 29 million. But so far no money has been added to the investors’ accounts. The 30-day grace period is in effect. If Russia does not pay, the default is official.
Oil ban, humiliation expired – pressure is mounting
The developments are amazing. At the beginning of the year, Russia’s default seemed almost impossible. But the Ukraine war and Western sanctions are having their impact on the Kremlin. Rating agencies have downgraded Russia’s credit rating. That was decided on Tuesday Oil embargo pressure on EU countries further increases. The United States issued a major rebate last week that allowed Russia to use frozen foreign exchange reserves abroad for service securities.
Since the beginning of the war, Russia has lost access to most of its currency reserves in foreign banks due to sanctions. Even relatively small amounts cause a big problem because the ruble is often not accepted as a means of payment.
Russia is fighting
The country’s impending bankruptcy was the first since 1918. This will close the country’s lightning fast fall in financial isolation after the Ukraine invasion. But Russia is fighting hard to prevent it. Russian Finance Minister Anton Silvanov, 59, on Friday stressed that he had enough money to meet his country’s obligations.
“Even under these conditions, we will do everything we can to reaffirm our role as a reliable borrower,” he told students in a lecture at the University of Finance in Moscow. Russia also implemented unplanned interest rate cuts to counter the strong currency.
The new suffering threatens
The bell rings. Meanwhile, the Federal Security Depository in Moscow has released a report on the NSD’s outstanding interest payments. The money is on the way. Not sure if this is true. The money did not arrive until Monday.
Regardless of this, the next suffering is already threatening. The lender committee meets this week. Issue: $ 1.9 million missed interest on bonds. This can trigger insurance premiums for investors “Bloomberg” Said to be worth billions of dollars. Also on June 23, the next installment of $ 235 million is due.
War chest hole
If Russia goes bankrupt, it does not mean state bankruptcy. According to experts, bankruptcy is not possible. As a result of the failure to pay, Russia can no longer borrow in the international financial markets.
A financial collapse abroad, but not at home. There, Putin could continue to finance his spending in rubles. For his war chest, the inability to pay would be a major setback.
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