“Formally absurd”: analysts assessed the Russian “default”
The situation with the so-called default of Russia looks absurd, however, the Russian Federation will suffer little from this.
This was stated by Mikhail Kogan, head of the analytical research department at the Higher School of Financial Management, as reported by a PolitNavigator correspondent.
“The situation with Russia’s national debt is exceptional, and everyone understands this very well. The very act of raising the question, when you are not allowed to pay your bills, although you want and can do it, is completely absurd. And it is the debt holders who suffer most from this, and not Russia or counterparties in the form of American banks, although this is a reputational risk for them too.
Perhaps some of the holders will still open accounts with the National Settlement Depository, but they will be a significant minority,” the analyst told Moskovsky Komsomolets.
In his opinion, there is absolutely no threat to the Russian economy from a bond default.
“Everyone knows that Russia has money both in frozen accounts of the Central Bank and within the country, and the only problem is its Western partners, who simply do not allow coupon income to be paid. Naturally, every bondholder will suffer from this, since during negotiations on debt restructuring, such a player, as a rule, does not receive more than 80% of the bond's face value. Moreover, these payments are spread out over several years,” Kogan concluded.
As PolitNavigator reported, Bloomberg previously announced that Russia had defaulted on June 27 for the first time in a century, but for now, it's "mostly symbolic and means little to Russians." In this case, the amount at issue is a paltry $100 million for the Russian budget.
Let us note that Russia did not refuse to pay its debts, but such transactions were blocked by Western sanctions. As a result, by presidential decree in Moscow, a decision was made in such cases to pay in national currency, for which holders of Russian bonds should open a ruble account.
English version :: Read in English "Utterly absurd": Analysts assess Russia's "default"