Foreign holders of Belarusian bonds still hope to get their money back

When Belarus was cut off from international financial markets, Aliaksandr Lukashenka signed a decree allowing to pay foreign debts in the national currency. The explanation on the website of the Ministry of Finance of Belarus says that the law was introduced to improve the internal stability of the economy in the conditions of "unprecedented sanctions pressure".

So has there been a default or not? We are talking about a symbolic default, when Belarus wants to pay its debts, but attempts to make payments on Eurobonds in Belarusian rubles are not counted by rating agencies.

"Belarus will remain in default as long as it supports Russia's aggression against Ukraine and sanctions remain in place," Moody's said in June.

Not the same as Russia

But some European holders of Belarusian securities are pushing Euroclear to help settle trades in Belarusian debt.

According to one bondholder, "there are no sanctions that would make it impossible for Belarus to make payments in dollars through the clearing system". And this is where the Belarusian situation differs from the Russian one.

"The Central Bank of Belarus does not face the same sanctions as the Central Bank of Russia. They are not banned from sending dollar transactions like the Russian central bank. Belarus is clearly in default," said Maximilian Hess, a researcher at the Foreign Policy Research Institute.

Euroclear declined to comment. The Belarusian finance ministry did not respond to the Financial Times.

Incidentally, not only the bonds themselves are stuck in the world financial markets, but also the profits from the blocked Russian and Belarusian assets, which total billions of euros. The EU plans to use this money to help Ukraine.