Article content summary pitch, Russian rating downgrade… Default with limited grace It is a matter of the Russian governments position, but the possibility of repayment is unknown International market does not recognize ruble redemption… It is difficult to issue bonds [Seoul=Newsis] Reporter Dong-hyun Baek = An employee is disclosing rubles at the Hana Bank Counterfeiting and Forgery Response Center in Jung-gu, Seoul on the morning of the 16th, when the possibility of a Russian default (default) is increasing. Russia has to pay $120 million in interest on dollar-denominated government bonds on the 16th (local time). However, it is unclear whether the funds will actually be able to repay the interest as the funds are tied up by the financial sanctions of Western countries. 2022.03.16. [Seoul=Newsis] Reporter Im Jong-myung = World investors are paying attention to whether Russia will be able to repay 117 million dollars in interest on dollar-denominated bonds on the 16th (local time). But unless a reversal occurs, the world will in fact see a Russian default. As of the 15th, the amount that Russia has to repay in relation to the dollar-denominated government bonds is equivalent to $731.35 million (about 908.9 billion won) in this month alone. The nearest of these is $117.19 million in interest, due in 16 days. Then, you have to pay $65.63 million on the 21st, $102 million on the 28th, and $44653 million on the 31st. Credit rating agency Fitch downgraded Russias Long-Term Foreign-Currency Issuer Default Rating to C on the 8th of this month. Fitch explained that these actions indicate that a default or default process has been initiated. According to the pitch standard, if the 30-day grace period starts to apply without repaying the debt on that day, the default rating of long-term foreign currency issuers in Russia drops to a limited default rating. A limited default is a condition in which debts are not paid, but debt collection procedures, such as filing for bankruptcy, have not been initiated. Previously, Fitch applied a limited default rating when the grace period began after failing to repay interest on dollar-denominated bonds during the Hengda Group crisis in China. The question is whether Russia wants to repay its debt, which is unclear. The debt to be repaid on the 16th is a dollar-denominated bond. A 30-day grace period may apply. Normally, if there is no money in hand, government bonds are sold to secure them, but Russia has not issued many government bonds, and it is difficult to issue government bonds due to sanctions, and it seems difficult to attract investors as the value of the ruble plummets. Russias Finance Minister Anton Siluanov said on the 14th that while Russia had enough money to repay its debts, Western sanctions had frozen about half of its foreign exchange reserves, about $315 billion. At the same time, he said that the West was systematically inducing defaults by means of economic sanctions, saying that it was an artificial default. He also said he would repay the interest on the dollar-denominated bonds due on the 16th, in rubles. Since the sanctions caused the default, it is a kind of retaliatory logic to pay back the ruble, which has become useless due to the collapse in value. Based on the exchange rate of Hana Bank on this day, 1 ruble is equivalent to only 0.01 USD. It is difficult to convert to dollars. Above all, paying interest on dollar-denominated bonds in rubles rather than dollars is not recognized by the international market. International Monetary Fund (IMF) President Kristalina Georgieva also viewed the possibility of a default as high. He appeared on CBSs Face the Nation on the 13th, and Russias default is no longer unlikely. Its because Russia has the money to pay off its debt but doesnt have access to it, she said.