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News > World

Russia to Buy Back $2 Billion in Bonds, but Will Pay in Rubles

  • Russian women pass in front of a currency exchange house.

    Russian women pass in front of a currency exchange house. | Photo: Twitter/ @cwebbonline

Published 30 March 2022
Opinion

Currently, the Russian government owes some US$40 billion in bonds denominated in dollars and euros, half of which is held by foreign investors.

On Thursday, Russia will repurchase bonds worth US$2 billion, which were due on April 4, although it intends to make the payment in rubles and not in the currency in which they were issued, the dollar.

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"Payment of the value of the bonds, including coupon income accrued as of the payment date, will be made on March 31, 2022 in the currency of the Russian Federation at the official exchange rate of the Bank of Russia," the Finance Ministry anounced.

With this repurchase, Russia will consider "its obligations to be met earlier than expected" to pay the maturity of the bonds and it reserves the right to "change the terms of the repurchase."

The holders of these bonds have until today at 14:00 GMT to send the instructions to the national depository entity to accept the payment.

The Finance Ministry does not specify how many investors in these bonds are Russian and how many foreigners, nor what will happen to those creditors who do not accept the terms proposed by the President Vladimir Putin's administration.

The repurchase of these bonds occurs when sanctions against Russia have been intensified, which has caused its disconnection from the SWIFT interbank payment system and the blocking of its foreign exchange reserves.

Currently, the Russian government owes some US$40 billion in bonds denominated in dollars and euros, half of which is held by foreign investors.

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