Sanctions on Russia Have Led to a Default on its Foreign Debt

Sanctions on Russia Have Led to a Default on its Foreign Debt

Russia failed to meet its foreign debts, and has officially defaulted on its sovereign financial obligations. This hasn’t happened since the turn of the Russian revolution. It is known that Russia has enough monetary reserves to meet the payout requirements, but payment restrictions and international sanctions have prohibited the international distribution of funds.

The payment deadline this Sunday was intentionally missed, a $100 million of interest that was due all the way back in May 27th. A default is considered when a payment has not been paid out 30 days after the grace period.

According to Russian authorities, they already sent Euroclear the international interest payment due by the country, but currently the money is stuck and has not been officially received by the creditors at Euroclear.

Credit agencies are known to certify defaults, but due to the sanctions stamped on the Russian financial system, the western governments have forced Russia into a standstill.

However, Russian Finance Minister, Anton Siluanov commented that the default predicament was a “farce” and proclaimed that the nation had the means to pay back all owned dept.

Western monetary boycotts have impeded and altogether impaired the Russian financial system, after they activated the sanction packages into place as a response to the Russian aggression in Ukraine. The ruble’s value was able to recover after the Russian central bank used unconventional methods, but despite that Russia is still completely excluded from the global financial matrix.

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