For the first time in a century, Russia has defaulted on its foreign-currency sovereign debt, at the height of tougher Western sanctions that have shut down payment methods to creditors abroad.
For months, the country devised ways to avoid the sanctions imposed following its invasion of Ukraine.
However, the grace period on roughly $100 million in interest payments due on May 27, a deadline considered a default event if missed, had expired as of the end of the business day (EOD) on Sunday.
According to Bloomberg, Russia’s Eurobonds have been trading at depressed levels since early March. The central bank‘s foreign reserves remained frozen, and the largest banks have been cut off from the global financial system.
However, given the economic and market damage already done, defaults are mostly symbolic at the moment, and it doesn’t matter much to Russians who are dealing with double-digit inflation and the worst economic downturn in years.
