Ukraine halts $3bn Russian Federation debt repayment

Russian Federation has said it would sue Ukraine if it doesn’t get its money back on time.

The moratorium is set to go into effect on Sunday, according to Prime Minister Yatsenyuk. “Till our proposals on restructuring are adopted or till the relevant judgment is delivered”, Yatsenyuk added. “From today all payments are suspended till our [government – Ed.] or a court makes a decision”, Yatsenyuk said.

It’s the latest spat between the two neighbors following a run of gas supply disputes and Russia’s annexation of the Crimean peninsula.

“We have expected these actions – looking at the line of conduct that the Ukrainian authorities have exercised in the last six months”, Storchak told journalists.

The decision to halt the payment is “effectively, a declaration of Ukraine’s default” the chairman of Foreign Policy committee in the Russian Federation Council, Konstatin Kosachev, said.

“We are not planning to impose any kind of sanctions against Ukraine”, Putin said.

“Ultimately, the problem of any lender is that he is interested in the economic growth of its borrower”, he said. On Thursday, Ukraine announced that it can not make the bond payment without violating a debt-restructuring deal with other global creditors.

After the same correspondent inquired whether a prisoner exchange was possible, perhaps involving the Ukrainian pilot Nadezhda Savchenko, who is being tried in Rostov in southern Russia, Putin replied that prisoner swaps “will have to be negotiated”.

“If you read the president’s words without bias [you would notice that] he has repeatedly talked about citizens of Russian Federation and other CIS countries who were going there on their own initiative”, Peskov said in a comment Friday.

This distinction would allow Kyiv to treat the transaction as a private debt.

Ukraine’s messy politics and the threat of a court battle with Russian Federation are prompting many fund managers to sell out of Ukraine’s bond market.