The sanctions against Moscow as a result of the Ukraine war are affecting large parts of the Russian economy. Russia has now announced that no more bonds will be placed this year.
In view of the economic sanctions imposed because of the Ukraine war, the Russian state no longer wants to issue government bonds for the time being.
In an interview with the daily newspaper “Isvestia” published on Monday night, the Russian Economics Minister Anton Siluanov announced that no bonds will be placed in the further course of the year. According to the minister’s assessment, the income from the sale of oil and gas, among other things, is sufficient to cover the state’s current expenditure.
The minister referred to the high costs that would be associated with further borrowing for the Russian state. Such a measure makes no sense, because the costs “would be astronomical”. With this, Siluanov was probably referring to the high interest rates that the Russian state is currently having to offer. In addition, Russia is cut off from a large part of the financial world due to Western sanctions, which severely limited the circle of buyers.
Russia’s credit rating downgraded again
Over the weekend, the US rating agency Standard & Poor’s (S&P) downgraded Russia’s creditworthiness again and lowered the rating to “Selective Default”. This indicates a partial payment default. Earlier, Russia, whose foreign exchange reserves are largely blocked due to Western sanctions, repaid two bonds in rubles and not in dollars as planned.
With the downgrade, S&P also discontinued its assessment of Russia’s creditworthiness. The other two leading rating agencies, Moody’s and Fitch, had previously stopped rating the country. The background to this is sanctions by the European Union, which prohibit agencies from assessing Russia’s creditworthiness in the future.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
