Russia Has Been Fulfilling Its Foreign Debt Obligations, Finance Minister Says

Siluanov pointed out that, even with the Ministry of Finance’s foreign currency accounts and the Central Bank’s foreign exchange reserves frozen, Russia kept using US dollars while conducting the transactions related to its debt obligations.

Russian Minister of Finance Anton Siluanov has announced that Russia, as a reliable borrower, has done all it could to fulfill its debt obligations.

During an interview with Russian newspaper “Izvestia”, Siluanov explained that Russia has been fulfilling its debt obligations in the currencies in which the borrowing was done, “first and foremost in US dollars”.

“And what have we encountered?” the minister inquired. “The Ministry of Finance’s foreign currency accounts were frozen, the Central Bank’s foreign exchange reserves were frozen,” he said.

The minister pointed out that, even in that situation, Russia kept using US dollars while conducting the transactions related to its debt obligations.

Earlier this week, the United States stopped Moscow from paying holders of Russia’s sovereign debt over $600 million from reserves held at US banks.

While the foreign currency reserves held by the Russian central bank at US financial institutions were frozen amid the sanctions imposed against Russia by the United States over the military operation Moscow launched in Ukraine in February, the US Treasury Department had been allowing the Russian government to use the frozen funds to make coupon payments on dollar-denominated sovereign debt on a case-by-case basis.

On 24 February, Russia launched a military operation in Ukraine after the Donetsk and Lugansk People's Republics, which Moscow had formally recognised earlier, asked for assistance to defend themselves from attacks by Ukrainian troops.

The Russian government stated that the goal of this operation is to neutralise Ukraine's military capacity, with precision strikes being carried out specifically against Ukrainian military infrastructure.

In response, the United States, the EU and several other countries imposed tough economic sanctions against Russia.