ten humanitarian corridors established in the southeast, where the fighting is concentrated

Russia in ‘selective’ default on foreign currency payments, says S&P

The financial rating agency S&P Global Ratings on Saturday downgraded Russia’s rating for its foreign currency payments to the level of “selective breach”after Moscow paid off a dollar debt in rubles earlier this week.

The rating of the agency is lowered, for payments in foreign currency such as the dollar, to ” SOUTH DAKOTA “while the note remains in “DC” for payments in rubles, according to a press release from the agency, which also announces that it will immediately drop its ratings on Russia, in accordance with the requirements of the European Union. Just one notch below SD on the agency scale: the rating “D”default.

“We do not believe that investors will be able to convert these ruble payments into dollars equivalent to the amounts originally owed, nor that the government will convert these payments within the 30-day grace period.”S&P explains.

The agency believes that sanctions against Russia are likely to be tightened in the coming weeks. “hindering Russia’s willingness and technical capabilities to meet 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 must pay interest and repay principal regularly. A country is considered to be in default when it cannot meet its financial commitments to its creditors, which may be States, financial institutions (International Monetary Fund, World Bank, etc.) or investors in financial markets. Non-compliance is classified as partial when the State does not reimburse part of its obligations.

For several weeks, Russia has avoided the danger of a default, as the US Treasury has allowed the use of foreign currencies held by Moscow abroad to pay off foreign debts. In March, Russia thus paid several installments of interest, demonstrating its willingness and ability to pay.

But as of Monday, the United States no longer authorizes Russia to pay its debt with dollars in US banks. As a result, JPMorgan, acting as a correspondent bank, blocked a payment.

As a result, the Russian Ministry of Finance announced on Wednesday that it had settled in rubles almost 650 million dollars due on April 4. The three main rating agencies S&P, Fitch and Moody’s act as arbitrators to declare a country in default. But Fitch and Moody’s have already abandoned the evaluation of the debt of the State and Russian companies, within the framework of the sanctions decided against Moscow. S&P Global Ratings was supposed to suspend the ratings on April 15, but finally announced on Saturday that it would stop doing so immediately.

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