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Russia slides into major foreign debt default for the first time almost in a century after it is isolated from the global financial system due to its war in Ukraine.
Russia skipped payments on two foreign-currency debts as of late Sunday. The day marks the end of a 30-day grace period in which the nation was supposed to pay bondholders the equivalent of $100 million in dollars and euros to bondholders, as per serval media reports.
Moscow denies claims that it has defaulted on its external debt, Kremlin spokesman Dmitry Peskov claimed Russia made bond payments due in May, but the fact that Euroclear delayed them due to Western sanctions on Russia was "not our problem."
Russia owes around $40 billion in foreign debts. Before the conflict, Moscow had around $640 billion in foreign money and gold reserves, much of which was stored overseas and is now frozen.
Moscow’s efforts to avoid default were stymied in late May when the US Treasury Department's office of foreign assets control essentially barred Moscow from making payments.
The last time Russia defaulted on its foreign creditors was more than a century ago, when the Bolsheviks, led by Vladimir Lenin, renounced the country's massive Czarist-era debt load in 1918, as per the reports.
Picture Credits: Reuters
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