“We are not defaulting on our bonds,” Treasurer Josh Frydenberg told a media conference on Wednesday.
Referring to it as a “minor matter”, the Treasurer insisted Australia would outsmart Russia.
He explained that Russia has been trying to sell its foreign reserves and transfer that into the local currency to strengthen its economy.
“What the Russians have done, for example, is they have said to all the Russian companies for them to sell their foreign reserves, their foreign currencies and transfer that into roubles.
“They have increased what is called their policy rate or their equivalent of their cash rate to 20 per cent. That's a doubling – or more than doubling of what they have been,” Mr Frydenberg said.
“They have closed their stock market; the stock market which had fallen by more than a third and their currency has fallen by more than a third. Their stock market is not working, and they have refused to pay coupons on their bonds.”
The important point, he said, is that the Russian government will not be able to sell its Australian bonds to Australian entities as a result of the sanctions.
“The key issue here is whether or not they can sell and dispose of the Australian bonds with Australian entities, and we are saying no to that,” the Treasurer said.
“That builds on the sanctions that we have put on more than 350 individuals and commercial entities, and that also builds on the other actions that they are calling for, for example SWIFT, and having the Russians removed from SWIFT.”
Maja Garaca Djurdjevic
Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.
