'Economic blitzkrieg' has failed, says Putin amid Russian default fears

WION Web Team
Moscow Updated: Mar 16, 2022, 11:05 PM(IST)

Since Russia's invasion of Ukraine, hundreds of tankers and bulk carriers have been diverted away from the Black Sea, while dozens more have been stranded at ports and at sea unable to unload their valuable cargoes. Photograph:( AFP )

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Reports claim Russia has asked an American bank to process the payments of $117 million for two dollar-denominated bonds but hasn't heard about the financial process going through amid the sanctions.

Amid default fears, Russia is due to pay interest on its foreign debt on Wednesday.

President Putin on Wednesday had said that "economic blitzkrieg" against Russia had failed as he sought to assure citizens that Russian banks had overcome the "challenge".

"Working literally 24 hours a day they continue to operate citizens' payments and accountancy and ensure the activity by the enterprises," Putin said.

Also Read: Fitch downgrades Russia’s sovereign rating, says default ‘imminent’

Russia had last recorded a sovereign default in 1998 when it defaulted on domestic debt and the first sovereign default on foreign currency debt since the Bolshevik Revolution in 1917.

Reports claim Russia has asked an American bank to process the payments of $117 million for two dollar-denominated bonds but hasn't heard about the financial process going through amid the sanctions. Western sanctions had targeted $300 billion Russian foreign currency reserves held abroad.

Watch: Russia could default on its debt within days

President Putin had asserted that "illegitimate action to freeze part of the bank of Russia's foreign currency reserves draws a line under the credibility of so-called first-class assets" blaming the US and EU of being in "real default on their obligations to Russia".

Russia has however shifted the onus on the US saying the default depended on the US. Finance minister Anton Siluanov speaking to state media said "We have the money. We made the payment. Now the ball is in the court of the American authorities" even as he accused the West of pushing Russia towards an "artificial default".

(With inputs from Agencies)

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