Russia will use US dollars to meet its April 4 payment obligations to foreign bondholders, Bloomberg reported Wednesday.- The Finance Ministry earlier offered rubles to repay local investors of dollar-denominated bonds.
Russia will use US dollars to make payments that are soon due to foreign holders of a $2 billion bond, Bloomberg reported Wednesday, while Moscow is set to pay local bondholders using the country's own currency.
The Finance Ministry launched a buyback of Russia's dollar-denominated debt using rubles to ensure payment to local investors. Meanwhile, foreign investors will receive dollars as planned, Bloomberg reported, citing a source who asked not to be identified.
Moscow has $2 billion of dollar-denominated bonds that are set to mature on April 4. The Finance Ministry on Monday filed a notice that it will make interest and principal repayments on the bonds and specified USD as the payment currency.
Then Finance Ministry said Tuesday it was also offering to buy back the bonds from investors in rubles, at 100% of their par value, at whatever the exchange rate is on March 31. Bond investors had until 5 pm local time Wednesday to tell the government they would be taking up the offer.
Russia's ability to meet its debt obligations has been under scrutiny after it was hit with Western sanctions following the launch of its war against
Fitch, Moody's, and S&P Global have each cut Russia's credit rating rating to junk territory in anticipation of a default.