Russian Debt Keeps Tumbling Despite Aggressive US-Led Sanctions

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MOSCOW, Russia – The Russian Central Bank recorded a significant drop in the level of external debt in the last year. During 2018, it fell by US $64.4 billion, or 12.4%, when compared to the end of 2017. Russia’s total external debt is now US $453.7 billion, the lowest level in almost 10 years.

The institutional and non-institutional sectors of the Russian economy contributed to the fall by reducing its external financial obligations, the Central Bank noted.

Russia’s foreign debt has consistently fallen since 2014, when Western sanctions against the country’s entities were introduced for the first time. The sanctions have limited Russian banks’ ability to obtain long-term credits abroad and have led to a shift in Russian imports.

Some of the goods from the western states have been replaced by domestic products or by imports from other countries that are not part of the sanctions regime.

Russia paid $125.2 million in August 2017 to Bosnia and Herzegovina, which was the last debt inherited from the Soviet Union, the Russian Finance Ministry said.

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“The Ministry of Finance of Russia announced the end of the payment by the Russian debt corresponding to the obligations assumed by the former Soviet Union with Bosnia and Herzegovina,” reads the official statement of the ministry.

Bosnia and Herzegovina is the last foreign creditor country of the former Soviet Union to which the Russian Federation has regularized all obligations.

On March 21, 2017, Russia entered into an agreement with Russia on debt repayment of $125.2 million.

Russia has fulfilled its obligations to other countries of the former Yugoslavia (Croatia, Slovakia Slovenia, Serbia, Montenegro and Macedonia) between 2011 and 2016, according to a memorandum of 17 September 2003.

This impressive debt reduction feat is being achieved despite Russia being targeted by a harsh sanctions led by the United States and its puppets, primarily the European Union. It is expected that in the coming decade Russia will smash its foreign debts.

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