Russian debt crisis Version 2

[metalman]

Russia to seek postponement of private debt -Nikkei

TOKYO, Feb 10 (Reuters) - Russia will request negotiations with European and other foreign banks to postpone repayment on up to $400 billion of its private sector debt, Japan's Nikkei business daily said on Tuesday.

The euro fell sharply on the the report, with the single European currency sliding more than 1 percent against both the dollar and the yen. [FRX/]
The newspaper quoted a Russian banking industry official as saying up to $400 billion in debt was at stake.

A proposal for postponing repayment had been submitted to the government and some foreign banks have already agreed to start negotiations, the Nikkei said.

"As was the case last week when Fitch downgraded Russia, bad news about Russia basically becomes a factor for the euro to fall," said Takahide Nagasaki, chief foreign exchange strategist for Daiwa Securities SMBC.

[Supercilious]

Re: Russian debt crisis Version 2

Hmmm... am I the only one smelling the Default 2.0 ?

It seems that the Fed's Hammer Drill is working hard this days....

[D-Mack]

Re: Russian debt crisis Version 2

The City fears Russia's default
20:30 | 05/ 02/ 2009




MOSCOW. (RIA Novosti political commentator Andrei Fedyashin) - The first Russian-British financial consultations in early February in London will reveal what Russia can expect from European banks. Regrettably, Russia cannot hope for much.

It should not expect to receive loans because its credit ratings are falling, and without loans, its ratings will continue to fall - a vicious circle.

Experts in London's City are openly talking about a risk of Russia's default on foreign debts, although they do not think it will be as bad as in 1998. After all official speeches, Deputy Prime Minister and Finance Minister Alexei Kudrin had to persuade the City that Russia will not fall so low.

The City has never been particularly interested in the common destiny of its business partners (clients). It has always wanted to know what they are doing to return the money to it at a good interest rate, and what they can offer if they cannot do that in time.

Britain is not among Russia's top lenders, but the City has long become an international financial center, and understands well that apart from gas, oil, missiles, and a mysterious soul, Russia has yet another formidable weapon - foreign debts. Their power has increased tremendously against the backdrop of the world financial turmoil. In this context, the City was eager to see what Russia planned to do with them.

According to an estimate of the Economist Intelligence Unit, on January 31 Russia's total external debts amounted to $465 billion. On January 27, its international reserves were $427 billion (Kudrin quoted this figure in the City on February 4). British newspapers claim (quoting earlier figures and comparing credit payments) that these reserves have gone below $400 billion. This year alone, Russian banks and companies must pay debts and interest rates worth almost $140 billion, a sum close to the Central Bank's reserves. In any event, none of these figures look good.

....

[c1ue]

Re: Russian debt crisis Version 2

Another financial system-derived hit article in the Western press.

Yes, Russia's near balance of foreign debts and foreign reserves is a 'problem', when the Baltics 2 to 1 or higher debt/foreign currency reserve ratio is not a problem?

What about the UKs own 14 to 1 debt/fc reserve ratio?

Lastly a curious blurring of private and public debt.

As I've noted many times before, the great thing about 'private' debt is that it can be defaulted on.

All the Russian government needs to do is pick off the choice parts that it doesn't want foreign banksters owning.

[D-Mack]

Re: Russian debt crisis Version 2

What about the UKs own 14 to 1 debt/fc reserve ratio?

It's still good for AAA... *cough*