Russia was defaulted for the first time since 1918 – Bloomberg
For the first time in a century, Russia has defaulted on its sovereign debt in foreign currency.
According to Bloomberg, the default of 2022 was the culmination of tough Western sanctions, which blocked the way to pay foreign creditors.
– For months, the country has been finding ways to circumvent the punishments imposed after the Kremlin’s invasion of Ukraine.
But on Sunday evening, the grace period for paying interest of $ 100 million from May 27 ended. Failure to pay is considered a default, – said in the publication.
Bloomberg emphasizes that such an event is a gloomy sign of the country’s rapid transformation into an economic, financial and political exile.
-Since the beginning of March, national Eurobonds have been trading at troubled levels, the central bank’s foreign exchange reserves remain frozen, and the largest banks have been cut off from the global financial system, – the media said.
At the same time, the publication notes that, given the damage to the economy and markets, the default is now quite symbolic and not very important for Russians, who are experiencing double-digit inflation and the worst economic contraction in recent years.
Russia, on the other hand, does not admit default, saying it has the funds to cover any bills.
– Last week, Russia announced that it would switch to servicing its outstanding sovereign debt of $ 40 billion in rubles, criticizing the force majeure situation, which, as they say, artificially created by the West, – added in the publication.
On June 23 and 24, the country’s Ministry of Finance made the last interest payments of about $ 400 million, according to a rule introduced by Russian President Vladimir Putin to transfer the corresponding amount in rubles to a local paying agent.
However, according to Bloomberg, none of the underlying bonds have conditions that would allow settlements in local currency.
The fact of non-payment of $ 40 billion debt in Russia was recorded during the rule of Boris Yeltsin in 1998, when the country experienced a financial crisis and the collapse of the ruble.
The last default in Russia occurred in 1918, when the Bolsheviks under Vladimir Lenin abandoned the debt burden of the tsarist era.
