Russia defaulted on foreign-currency bonds for the first time in a century as Western sanctions hampered payments to foreign creditors.
Over the past several months, the country has escaped default several times. However, by the end of Sunday (June 26), the grace period for the $100 million interest payment ended and Russia has yet to repay the debt. This is considered a move that shows Russia defaulting on foreign debt for the first time since 1918.
After opening a military campaign in Ukraine, Russia was subject to a series of sanctions from the West, which reduced the foreign exchange reserves of the central bank. central banks were frozen and major banks were cut off from the SWIFT global financial system.
Russia rejects the concept of “default”, insisting that it has enough money to pay off any debt, but is blocked from making payments. Last week, Moscow announced that it would repay a $40 billion bond debt in rubles due to the “force majeure” situation caused by the West.
This is a very rare thing: A government can repay a debt, but is forced into default by a foreign government,” said Hassan Malik, an expert at Loomis Sayles (USA) company.