After a grace period on two international bond payments expired on Sunday night, Russia may be facing its first big foreign debt default in almost a century. A total of $100 million in interest payments were due on May 27 and were subject to a grace period that ended on Sunday night.
Several media sites have stated that bondholders have yet to receive payments, owing to international restrictions that prevented Russia from paying in its ruble currency. The Kremlin has consistently stated that there is no need for Russia to fail, but it is unable to pay bondholders due to sanctions, accusing the West of attempting to force it into a fake default.
According to Reuters, which cited two sources, some Taiwanese holders of Russian Eurobonds have not received interest payments due on May 27, indicating that Russia may be approaching its first foreign debt default since 1918, despite having abundant funds and a readiness to pay.
Russian Finance Minister Anton Siluanov allegedly told Russian state-owned news agency RIA Novosti that the payment blockage does not represent a true default, which often occurs as a consequence of refusal or incapacity to pay, and referred to the scene as a “farce.”
Western sanctions in reaction to Russia’s invasion of Ukraine and Moscow’s countermeasures have virtually isolated the nation from the global financial system, but the Kremlin has found methods to pay bondholders many times.
To counteract this, the leaders of the G-7 nations will declare a ban on Russian gold imports in response to Moscow’s aggressive invasion of Ukraine, US President Joe Biden revealed on Sunday morning. The United Kingdom has also joined the United States, Canada, and Japan in prohibiting imports of Russian gold in an effort to limit Moscow’s ability to support the Ukrainian war.
