Russia is now a defaulter.

Russia is experiencing its first default on foreign debt since 1918 due to Western sanctions. For the first time since the Bolshevik Revolution more than a century ago, Russia has defaulted on its foreign debt.

Russia is now a defaulter

Russia is now a defaulter.

The White House stated that the default demonstrates the effectiveness of Western sanctions imposed on Russia since its invasion of Ukraine, in response to news that Moscow had failed to pay nearly $100 million in interest on two bonds during a 30-day grace period that ended Sunday.

G7 Summit

A senior administration official stated on the sidelines of a G7 summit in Germany that “this morning’s news around the determination that Russia has defaulted for the first time in more than a century situates how strong the responses that the U.S., along with allies and partners, have taken, and how dramatic the consequences have been for the Russian economy.”

Russia denied being in arrears, claiming that the payments due Sunday had already been sent in dollars and euros on May 27 and that the funds were still in the Belgian clearinghouse Euroclear.

Moody’s rating agency

The rating agency Moody’s stated that the “missing coupon payment implies a default” in a statement published late Monday.

By the time the 30-calendar-day grace period expired on June 27, holders of Russia’s sovereign debt had not received coupon payments on two Eurobonds worth $100 million, which the statement had described as an event of default.

The Kremlin said on June 22 that it would repay its foreign debt in rubles rather than in the currency in which the bonds were issued. Moody’s also predicted that Russia will miss more payments in the future.

The historical default, the first time Russia has defaulted since 1918, was widely expected when the U.S. Treasury Department canceled a carve-out of sanctions that allowed U.S. bondholders to be repaid by Russia and blocked half of the country’s foreign funds.

Source: Laatste Nieuws

Russia is now a defaulter.