MOSCOW, May 25. /TASS/. Russia will continue to fulfill its obligations on external public debt, despite the refusal of the US Treasury to renew the license for servicing it, payments will be made in rubles, the Finance Ministry said in a statement on Wednesday.

"The Finance Ministry, as a responsible borrower, confirms its readiness to continue servicing and repaying all debt obligations. Taking into account that the refusal to renew the specified license makes it impossible to continue servicing the state external debt in US dollars, payments will be made in the currency of the Russian Federation with the possibility of their subsequent conversion into the original currency of the obligation through NCO JSC National Settlement Depository as a paying agent," the ministry explains.

According to the ministry, the refusal to renew the license infringes on the rights of foreign investors and undermines confidence in Western financial infrastructure.

"Now we have money, and the willingness to pay is also there. This artificially created situation by an unfriendly country will not affect the quality of life of Russians," Russian Finance Minister Anton Siluanov said as quoted by the ministry press service.

According to the Finance Ministry, payments to holders of Russian Eurobonds within the Russian accounting infrastructure will be made to their accounts with National Settlement Depository (JSC NSD).

"Payments to holders of Eurobonds of the Russian Federation using foreign financial intermediaries will be made to type "C" accounts of these financial intermediaries in accordance with the provisions of Decree of the President of the Russian Federation dated March 5, 2022 No. 95 "On the temporary procedure for fulfilling obligations to foreign creditors" with the possibility to restore access to these funds for investors who have provided JSC NSD with documents proving their rights to receive the relevant payments," the ministry explains.

On Tuesday, the US Treasury did not extend the term of the general license allowing Russia to make payments to service its external debt, it expired on May 25 at 07:01 Moscow time. This license excluded payments for servicing a part of Russia’s sovereign debt from anti-Russian sanctions. The term of its validity was originally set until May 25, but there was an option to extend it.

Public debt payments

On May 20, Russia’s Finance Ministry announced that it had fully fulfilled its obligations to pay coupon income on Eurobonds maturing in 2026 in the amount of $71.25 mln, as well as with redemption in 2036 in the amount of 26.5 mln euros.

In late April, the Finance Ministry announced that it had made payments on Eurobonds Russia-2022 and Russia-2024 in dollars. Earlier, Russia was forced to make a payment in rubles after its correspondent bank blocked dollar funds in early April. As the head of the Bank of Russia, Elvira Nabiullina, said, the Finance Ministry has all the resources to fulfill its obligations and any default is ruled out.

According to the Russian Finance Ministry, as of April 1, 2022, the country’s external public debt amounted to $57.143 billion, including $37.26 billion of debt on external bonded loans. In total, Russia has 15 active bonded loans with maturities from 2022 to 2047.

Payments in rubles

In response to the sanctions, Russian President Vladimir Putin on March 5 allowed to pay foreign currency debts to "unfriendly" countries in rubles. According to the decree, debtor companies or the state itself can open an account in Russian banks in the name of a foreign creditor and transfer payments to it in rubles at exchange rate of the Bank of Russia on the day of payment. Creditors from countries that have not imposed sanctions can receive payment in euros or dollars if the Russian debtor receives special permission for it.