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Russia Debt Default May Be Averted: Sanctions Update

The Russian government may have avoided defaulting on its debt Thursday.  

Russia was up against a March 16 deadline to pay $117 million in interest on two dollar-denominated bonds.

According to Bloomberg, “JPMorgan Chase & Co. has processed funds that were earmarked for interest payments due on dollar bonds issued by the Russian government and sent the money on to Citigroup Inc.”

Russia's government said Thursday the debt payment was made in a foreign currency, but did not reveal which currency.

The International Business Times noted, “Russia was at risk of its first foreign debt default in more than a century, though there is a 30-day grace period to provide the funds to creditors. Russia last defaulted on foreign currency-held debt in 1918, when Bolshevik revolution leader Vladimir Lenin refused to recognize the debts of the deposed tsar's regime.”

On Friday, The Central Bank of Russia maintained its key interest rate at 20%.

Russia's central bank said in a statement, “The Bank of Russia’s monetary policy is set to enable a gradual adaptation of the economy to new conditions and a return of annual inflation to 4% in 2024.”


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