ten humanitarian corridors set up in the southeast, where fighting is concentrated

ten humanitarian corridors set up in the southeast, where fighting is concentrated

Russia defaults “selectively” on its foreign currency payments, S&P reports

Financial rating agency S&P Global Ratings downgraded Russia’s rating for foreign currency payments on Saturday. “Selective default”after Moscow settled a dollar debt in rubles earlier this week.

The agency’s rating for foreign currency payments such as the dollar is lowered to “SD”while the note remains at ” CC “ for payments in rubles, according to a statement from the agency, which also announces the immediate cessation of its ratings on Russia, in accordance with the requirements of the European Union. There is only one step lower than SD in the agency scale: the note “D”by default.

“We do not believe that investors will be able to convert these payments into rubles in dollars equivalent to the amounts originally due, or that the government will convert these payments within the 30-day grace period.”explains S&P.

The agency believes sanctions against Russia are likely to be tightened in the coming weeks “Hampering Russia’s willingness and technical capabilities to honor the terms and conditions of its obligations to foreign debtors”.

Like all states, Russia borrows money in the form of bonds, often in dollars, and has to pay regular interest and repay capital. A country is considered in default when it is unable to meet its financial commitments to its creditors, which may be states, financial institutions (International Monetary Fund, World Bank, etc.) or investors in the financial markets. . The default is described as partial when the state does not repay part of its obligations.

For several weeks, Russia has ruled out the danger of a default, as the US Treasury has allowed the use of foreign currency held by Moscow abroad to settle foreign debts. In March, Russia paid several installments of interest, demonstrating its willingness and ability to repay.

But since Monday, the United States has not allowed Russia to repay its debt with dollars held in US banks. As a result, JPMorgan, which served as the correspondent bank, blocked a payment.

As a result, the Russian Ministry of Finance announced on Wednesday that it had settled nearly $ 650 million in rubles due on April 4. The three major S&P rating agencies, Fitch and Moody’s, serve as arbitrators to declare a country in default. But Fitch and Moody’s have already abandoned the assessment of the debt of the state and Russian companies, as part of the sanctions decided against Moscow. S&P Global Ratings was due to stop rating by April 15, but finally announced on Saturday that it would stop immediately.

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