Reports Claim Russia Defaulted on Foreign Debt for the First Time in a Century – According to media sources, Russia has made a foreign currency loan default for the first time in more than a century. Russia’s access to the global payment systems has been hampered by financial sanctions imposed on the country.
A $100 million interest payment is said to have been missed on Sunday as a result of the U.S. Treasury blocking a procedure that would have let the Kremlin convert rubles to pay its debts.
Bondholders will need to agree on whether or not there has been a formal default on the loans now that the grace period has expired. According to Reuters, Russia’s decision to withhold payment is “an act of political theatre at bondholders’ expense” and their default turns them into “political stooges.”
The Kremlin, on the other hand, asserts the opposite and calls the default a “farce” because Western sanctions prevented the country from making payments. According to the Russian Finance Ministry, payments in euros were made to bondholders.
The Russian government asserts that the sanctions are the only reason that financial institutions are unable to take funds from the country, that the default accusations are unfounded, and that it has the money to make the payments.
The Bolshevik Revolution in 1918 marked the last time that Russia went into default on a foreign debt. Dmitry Peskov, a Kremlin spokesman, was described by NBC as telling reporters that Western sanctions had prevented the payment from being made, and that as a result, it was “not our concern.”
According to additional reports, the Russian Federation asserts that it used the Euroclear financial system and its onshore National Settlement Depository (NSD). The Kremlin claims that it has met its obligations to international investors despite the financial boycott.
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According to Reuters, Vladimir Putin, the president of Russia, issued a decree that designates particular banks to handle the bondholder payment responsibilities. As the president’s first trip since the commencement of the ongoing war, Putin also plans to visit Tajikistan on Tuesday.