A scheme similar to the one Russia uses to get foreign payments for its natural gas will be used to service its sovereign debt, Finance Minister Anton Siluanov explained to a Russian business daily. Debtholders will need to open two accounts in a designated Russian bank to get what is due to them, Vedomosti reported on Sunday.
Russia used the West-controlled financial system for payments related to its debt, but access to it was restricted under the sanctions imposed in retaliation for attacking Ukraine. The US previously allowed payments to Russian Eurobond holders – first using its frozen foreign reserves and later proceeds from its foreign trade – but last week the US Treasury announced that the waiver won’t be extended.
Speaking to Vedomosti, the minister said that Russia intends to use a scheme like the one it demanded from buyers of its natural gas based in “unfriendly nations” to circumvent the US ban. The ministry previously said the debt would be paid in rubles.
The gas scheme, which was launched to ensure that payments in foreign currency are not seized by Western nations, requires that European customers open two accounts in a Russian bank. The payments are made in euros then converted to the Russian currency.