- MOSCOW, May 14 (AFP) - Russia skipped a 1.3 billion dollar (1.2 billion
euro) payment on its Soviet-era debt Friday, transferring only interest
payments on a raft of obligations to its debt agent.
- The finance ministry said it had paid
333.63 million dollars to Vnesheconombank to cover interest payments on
five debt instruments covering a mixture of Soviet-era and Russian liabilities.
- However, the ministry failed to make
a 1.346 billion dollar payment on principal for MinFin-3, although Vnesheconombank
will make a coupon (interest) payment on the obligation.
- With 1.6 billion dollars of liabilities
maturing, May is a peak month for debt repayments. A further 2.5 billion
dollars are due in June.
- Conceding it had no hopes of making Friday's
payment deadline, the finance ministry last week asked creditors for a
six-month grace period in which to reschedule the terms of payment, but
negotiations have not yet begun.
- MinFins are dollar-denominated domestic
debt which were issued in 1993 to compensate Russian entities whose hard-currency
accounts in state bank Vnesheconombank were frozen when Moscow defaulted
on Soviet debt in 1991.
- While technically domestic debt, the
dollar-denominated MinFins are considered part of Russia's external debt,
a 141 billion dollar mountain Moscow openly admits it cannot hope to pay
without renegotiating the terms.
- The dismissal of the Russian government
Wednesday by President Boris Yeltsin has put on ice Moscow's attempts to
unravel its Gordian knot of debt, 17.5 billion dollars of which comes due
- Moscow has only budgeted repayments of
9.5 billion dollars in the 1999 budget and is struggling to thrash out
a rescheduling deal with its long-suffering creditors.
- They include the International Monetary
Fund, which is due 4.6 billion dollars this year and has lent Russia some
20 billion dollars since the collapse of the Soviet Union.
- The renewed government crisis and political
uncertainty surrounding attempts by parliament to impeach President Boris
Yeltsin has scuppered a raft of IMF-backed legislation the Fund has demanded
in return for credits of 4.5 billion dollars over 18 months.
- The political turmoil has had a knock-on
effect on other financial aid to Russia, notably from the World Bank and
- Faced with generalised default on its
liabilities, Moscow has vowed to make payments on Russian liabilities while
running up arrears on Soviet-era debt in the hope of nailing down a rescheduling
- The strategy forms a key plank of its
talks with the Paris and London Clubs of sovereign and commercial creditors,
with whom the authorities are locked in difficult negotiations.