Samson » April 5th, 2022
A dangerous measure from the US Treasury leaves Russia with 3 difficult choices
5th April, 2022
The US Treasury has suspended Russian debt payments in dollars from Russian government accounts in US banks, increasing pressure on Moscow to find alternative funding sources to pay bond investors
A spokesman for the Treasury Department’s Office of Foreign Assets Control told Bloomberg that the move aims to force Russia to choose between three alternatives, including draining its existing dollar reserves, obtaining new revenue, or defaulting on payments
Reuters quoted a source familiar with the matter, that the latest coupon payments on Russian sovereign bonds were stopped, bringing it closer to default, in a historic event
The International Monetary Fund earlier warned of the risk of Russia defaulting on its debt obligations as a result of the unprecedented sanctions imposed on it due to its invasion of Ukraine, which will make it difficult to convert its reserve assets with the Fund, known as Special Drawing Rights, into currency
The source said that the latest coupon payments on the sovereign bonds did not get permission from the US Treasury to be dealt with by JP Morgan, the correspondent bank, pointing out that Russia has a grace period of 30 days for the payment of the amount
The payments are for bonds due in 2022 and 2042, and the correspondent bank processes the coupon payments from Russia, sending them to the payment agent for distribution to overseas bondholders
A spokeswoman for the US Treasury confirmed that some payments are no longer allowed, adding, “Today is the deadline for Russia to pay other debts… As of today, the US Treasury will not allow any payments of debt in dollars from the accounts of the Russian government in US financial institutions.” Russia must choose between draining residual valuable dollar reserves, the arrival of new revenue, or default
Russia, which has a total of 15 international bonds maturing with a face value of about $40 billion, has avoided defaulting on its international debt so far, despite unprecedented Western sanctions. But the task is getting more difficult. If Russia fails to make any of its subsequent bond payments within their due dates, or pays in rubles instead of dollars, euros or some other specified currency, it will constitute a default
While Russia is unable to access international borrowing markets due to Western sanctions, a default will prevent it from accessing those markets until creditors are paid in full and any legal issues arising from the default are resolved LINK
Russia Wields A New Weapon Against The West
5th April, 2022
In a new escalation with the West, Russia announced its intention to export food and crops to “friendly countries” only, provided that it is sold in rubles or the currencies of those countries. Analysts considered this a new weapon that would be scorched by Europe, which is the largest importer of Russian agricultural products.
“We will only supply food and agricultural products to our friends. Fortunately we have a lot of them, and they are not in Europe or North America at all,” said Dmitry Medvedev, deputy head of the Russian National Security Council.
Medvedev stressed that the priority in food supplies will be for the local market and control of prices, pointing out that the agricultural supplies of friends will be in rubles, or in their national currencies at agreed rates. Medvedev’s comments come after Moscow recently demanded that foreign buyers pay for Russian gas in rubles, in response to the freezing of Russia’s assets in the West due to its attack on Ukraine.
Keith Boyfield, a fellow at the Institute of Economic Affairs in London, says that Russia has started to use its weapons, in turn, against the West, starting with energy and then agricultural crops, in response to the economic sanctions that were imposed on it with the start of the war in Ukraine. LINK
Chinese companies plan to buy Russian gas at attractive prices
5th April, 2022
Bloomberg” agency, quoting sources, reported that major Chinese importers of liquefied natural gas, including “Sinopec” and “PetroChina”, are in talks to buy gas from Russia at reduced prices
And the agency “Bloomberg” indicated that China has bought several shipments of liquefied natural gas from Russia during the past few weeks, which are trading at a discount of more than 10%, according to traders in the sector
According to the agency’s interlocutors, “Chinese importers intend to use Russian companies to participate in tenders for the purchase of Russian liquefied natural gas on their behalf, in order to hide these transactions from foreign countries
Bloomberg also indicated that Chinese companies are ready to buy Russian gas despite threats of Western sanctions. According to the agency, Chinese oil refineries are also buying Russian oil, at reduced prices
And Bloomberg says that China does not have an urgent need for liquefied natural gas now, but buying Russian gas at competitive (reduced) prices can help in storage before gas prices rise again LINK
Popeye7 » April 5th, 2022
Imo, the changing of the guard so to speak on the world stage is taking place as we see China, and Russia both no longer concerned about the Western powers… Especially the US… While showing the world how weak sanctions are… Interesting time we are living in…
Source: Dinar Recaps
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