Russia rejects information that it entered into

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The Kremlin has rejected reports that Russia has entered the first sovereign debt default in decades, with some bondholders not receiving interest due until the deadline, which expired on Monday, Reuters reports.

In a discussion with reporters, Kremlin spokesman Dmitry Peskov said Russia had made payments on bonds due in May, but that the payment was blocked by Euroclear because of Western sanctions on Moscow “is not our problem.” .

Moscow is struggling to continue payments on its $ 40 billion foreign debt after Western sanctions imposed after the invasion of Ukraine virtually pushed Russia out of the global financial system and made its assets unacceptable to many investors.

Previously, about half of Russia’s gold and foreign exchange reserves – nearly $ 300 billion – had been blocked as a result of sanctions.

“Our position is well known. Our reserves are illegally blocked and all attempts to use the reserves will also be illegal, “Peskov said.

Euroclear officials did not immediately respond to requests for comment.

With a view to expanding Western sanctions, the United States, Britain, Japan and Canada will ban gold imports from Russia on the occasion of the G7 summit that began on Sunday in Germany.

Asked if Russia would be able to redirect its gold to Asia, where the main consumers are, Peskov replied that the global market for precious metals “is quite large”.

“And, as we have done with other goods, of course, if a market loses its appeal, there is a redirection to places where conditions are more comfortable,” the Kremlin spokesman added.

The Kremlin has repeatedly argued that there is no reason for Russia to become incapacitated, blaming international sanctions for its inability to repay the amounts owed to Russian bondholders.

Russia’s efforts to avoid what would be its first major international default since the Bolshevik Revolution a century ago hit an insurmountable hurdle in late May, when the US Treasury effectively blocked Moscow’s ability to make payments. bondholders.

“Since March, we have thought that a default in Russia is probably inevitable, the only question being when it will take place. The US Treasury has answered this question for us, and now the default is imminent, “said Dennis Hranitzky of the law firm Quinn Emanuel.

Even if a default were largely symbolic, given that Russia now cannot borrow from international markets – nor does it need to borrow given the high revenues generated by oil and gas exports – the stigma associated with the inability to pay the external debt would increase the costs of borrowing in the future.