Russia

Russia’s closely watched dollar payments on two bonds are trickling through to investors after the country dipped into its local holdings of the U.S. currency and sidestepped its first foreign default in a century, Bloomberg News reported. The transfer of the $650 million had got tangled up in the wide-ranging sanctions imposed after the invasion of Ukraine. And despite the 11th-hour escape before a Wednesday deadline to get the funds to creditors, Russia could face bigger hurdles within weeks that scupper future payments. For now, it appears money is getting through.

The European Union must avoid locking itself into years of dependence on fossil fuels as it races to replace Russian oil and gas with supplies from other countries, 11 former EU policy chiefs have said in a letter to the bloc's current leadership, Reuters reported. The European Commission will this month unveil plans to end Europe's reliance on Russian energy, which are expected to expand renewable energy faster while encouraging the urgent replacement of Russian gas with alternative supplies.

Russian Prime Minister Mikhail Mishustin signed a decree cutting the state-backed mortgage rate and extending the programme, part of wider measures aimed at stimulating economic growth, Reuters reported. Russia is grappling with the fallout from Western sanctions over what Moscow calls a special military operation in Ukraine to demilitarise its neighbour and rid it of extreme anti-Russian nationalism. The state-backed mortgage scheme that has helped support a construction boom in Russia had been due to expire on July 1.

Poland urged its European Union partners on Monday to unite and impose sweeping sanctions on Russia’s oil and natural gas sectors over the war in Ukraine, and not to cave in to pressure to pay for their gas in Russian rubles, the Associated Press reported. The appeal came as EU ministers met in Brussels to discuss their response to Russia’s decision last week to cut gas supplies to Bulgaria and Poland. Energy giant Gazprom says the two countries failed to pay their bills in April. “We will call for immediate sanctions on Russian oil and gas.

The sanctions imposed on Russia in response to its invasion of Ukraine will not be lifted until Moscow reaches a peace agreement with Ukraine, German Chancellor Olaf Scholz said, adding that it was for Ukraine to determine the peace terms, Reuters reported. Scholz, in an interview broadcast Monday on ZDF public television, said Russian President Vladimir Putin had miscalculated if he had anticipated he might be able to gain territory from Ukraine, declare an end to hostilities, and see Western countries drop sanctions. "He didn't think his entire Ukraine operation through," Scholz said.

The EMEA Credit Derivatives Determinations Committee said on Thursday it met to prepare for holding an auction to settle credit default swaps in case Russia goes into default, Reuters reported. Russia made a payment due on April 4 on two sovereign bonds, but it was made in Russian roubles rather than the U.S. dollars it was mandated to under the bond terms. Earlier this month the Committee declared a "potential failure to pay" had occurred, dating it to April 4. A 30 calendar day grace period expires next week, after which Russia could be declared in default.

Investors who buy the depositary receipts (GDRs) of Russian-companies that were traded on foreign exchanges in order to swap them into shares will be unable to sell the shares quickly, Russia's central bank said in a statement on Wednesday, Reuters reported. A law that came into effect this month requires Russian companies to delist their depositary receipts from foreign bourses and convert them into local securities in a bid to reduce foreign control.

Russian natural gas deliveries to Austria are continuing unrestricted and there is no indication that will change, its government said on Wednesday while adding it is scrambling to find alternative sources, Reuters reported. Austria obtains 80% of its natural gas from Russia, a heavy dependency that it says will take time to end now that Russia's invasion of Ukraine has made plain the need to shift away from Europe's cheapest source of gas. "Since the start of the war delivery volumes have not changed. In fact, they have increased," Austrian Chancellor Karl Nehammer told a news conference.

Germany is preparing for a change of control at the PCK refinery in Schwedt operated by Russian state-owned Rosneft (ROSN.MM) that accounts for all of Germany's remaining Russian oil imports, Economy Minister Robert Habeck said on Wednesday, Reuters reported. Germany has set out plans to become independent of Russian oil, which would make a European Union oil embargo manageable for Europe's biggest economy. It has reduced the proportion of oil it sources from Russia to 12% from 35%, leaving PCK the only remaining consumer of Russian oil in the country.

Hungary's OTP Bank, Central Europe's largest independent lender, is under pressure from the government of Ukraine, where the bank is also present, to sell its Russian unit, Chief Executive Sandor Csanyi said on Wednesday, Reuters reported. Earlier this month Csanyi said the bank would sell its Russian operation if there was a buyer, adding market presence there could become a moral issue. The Russian and Ukrainian units accounted for 15.8% of OTP's profit last year.