Russia defaults on foreign debt - Bloomberg

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In Russia, the deferral of interest payments in the amount about EUR 100 million, which were to be paid on May 27, has expired. Therefore, the fact of non-payment of interest on the debt in the deadline is considered an event of default. Prior to that, for months, Russia has been finding ways to circumvent the sanctions imposed after the full-scale invasion of Ukraine.

"The announcement of default is a symbolic event. The Russian government has already lost the ability to issue debt denominated in dollars. Even now, Russia cannot borrow in most countries," said Takahide Kiuchi, an economist at the Nomura Research Institute in Tokyo.

Since the beginning of March, the foreign exchange reserves of the Russian central bank remain frozen, and the largest banks are cut off from the world financial system.

Russia itself has refused to accept default, saying it has the funds to cover any bills but is unable to make payments. Billions of dollars a week continue to flow into the state treasury from energy exports. So trying to get away with it, Moscow announced last week that it would move to service its USD 40 billion sovereign debt.

There already was a default announcement in the history of the Russian Federation. In 1998, during the financial crisis in Russia and the collapse of the ruble, the government of President Boris Yeltsin defaulted on its domestic debt of USD 40 billion.