Russia

Russia could already be in default on some of its foreign currency debts, according to bondholders that claim they are still owed a small interest payment that Moscow didn’t send to them earlier this spring, WSJ Pro Bankruptcy reported. A change in U.S. sanctions on Wednesday is expected to cut off Russia’s ability to stay current on its dollar-denominated sovereign debt, which it has managed to continue servicing since the invasion of Ukraine began.

Russia’s central bank delivered its third interest-rate reduction in just over a month and said borrowing costs can fall further still, halting a rally in the ruble as it unwinds the financial defenses in place since the invasion of Ukraine, Bloomberg News reported. The Bank of Russia lowered its benchmark to 11% from 14% on Thursday at an extraordinary meeting it announced only a day earlier. All 23 economists surveyed by Bloomberg predicted a reduction, with most forecasting a cut of two percentage points.

Russian bailiffs have seized more than 7.7 billion roubles ($123.2 million) from Alphabet's Google that the U.S. tech giant had been ordered to pay as part of a fine on its turnover, Interfax news agency reported on Thursday. Google's Russian subsidiary last week said it planned to file for bankruptcy after authorities seized its bank account, making it impossible to pay staff and vendors, but free services including search and YouTube will continue operating. Read more.

World Bank President David Malpass on Wednesday suggested that Russia's war in Ukraine and its impact on food and energy prices, as well as the availability of fertilizer, could trigger a global recession, Reuters reported. Malpass told an event hosted by the U.S. Chamber of Commerce that Germany's economy, the world's fourth largest, has already slowed substantially due to higher energy prices, and said reduced production of fertilizer could worsen conditions elsewhere. "As we look at the global GDP ... it's hard right now to see how we avoid a recession," Malpass said.

Russia will service its dollar debt in rubles after the expiry of a sanctions loophole closed the option of payments in the US currency, potentially putting Moscow on track to default, Bloomberg News reported. The announcement came a day after the US confirmed the end of the waiver, creating another headache for Russia as it tries to get funds to investors. A payment in rubles would breach the terms on a 2026 dollar bond with coupons due this Friday, triggering a 30-day grace period before Russia could potentially slip into default.

European Union states have reported the freezing of about 23 billion euros ($24.5 billion) of assets of the Russian Central Bank, a top EU official said on Wednesday, revealing for the first time a figure that was expected to be much higher, Reuters reported. Russia has publicly said that Western sanctions led to the freezing of about $300 billion of its central bank's assets globally.

Some 62 million barrels of Russia's flagship Urals crude oil, a record amount, are sitting in vessels at sea, data from energy analytics firm Vortexa showed, as traders struggled to find buyers for the crude, Reuters reported. The United States and other countries have banned imports of Russian crude and oil products over its invasion of Ukraine, and others have avoided acquiring cargoes out of fear of future sanctions. The European Commission is considering an embargo of Russian oil.

Germany plans to order coal-fired power plants that were due to be shut down to be placed in reserve, as part of a plan to ensure the country can keep the lights on if supplies of natural gas from Russia are abruptly cut, the New York Times reported. A bill drawn up this week by the economy ministry, led by Robert Habeck, a member of the Greens, envisions maintaining power plants that burn coal and brown coal, or lignite, so they could by fired up on short notice. The proposed regulation, if adopted, would remain in place through March 31, 2024.

Strict limits on public borrowing and spending will be suspended for another year, the European Union said on Monday, in order to help member nations deal with the economic fallout of the war in Ukraine, the New York Times reported. The stringent fiscal rules were temporarily relaxed in March 2020 in response to the coronavirus pandemic, allowing for generous state aid to struggling businesses and citizens. They were due to be reinstated at the start of next year.

Lithuania, Slovakia, Latvia and Estonia will call on Tuesday for the confiscation of Russian assets frozen by the European Union to fund the rebuilding of Ukraine after Russia's invasion, a joint letter by the four showed on Monday, Reuters reported. On May 3, Ukraine estimated the amount of money needed to rebuild the country from the destruction wrought by Russia at around $600 billion. But with the war still in full swing, the sum is likely to have risen sharply, the letter said.