Russia’s recent default on its foreign debt – it’s first since 1918 – has been hailed as proof that the sanctions imposed by western governments since the invasion of Ukraine in February are working.
A 30-day grace period on US$100 million (£82 million) in interest on two bonds ended on June 27 2022, with Russia’s repayments on this foreign debt not reaching creditors. While the Kremlin claims the payment has been held up by clearing house Euroclear, ratings agency Moody’s has predicted the country is likely to continue to default on payments because it is repaying in roubles, rather than the currency specified in the bond prospectuses.
Amid this uncertainty, potential longer-term implications include the impact a default will have on Russia’s ability to attract investors, now and in the future.
