Russia has entered its first major foreign debt default for over a century, after missing a key deadline Sunday night.
Interest payments totaling $100 million were due on May 27 with a grace period lapsed May 26. Reuters reported that two Taiwanese holders of Russian eurobonds say they haven’t received the agreed interest payments.
“This morning’s news around the finding of Russia’s default, for the first time in more than a century, situates just how strong the reactions are that the US, along with allies and partners, have taken,” a senior administration official said on the sidelines of a G7 summit, as reported by CNN.
It would be Russia’s first foreign debt default since 1918, despite having cash and willingness to pay.
According to media reports bondholders have not received the payments after Russia’s attempts to pay in Ruble were blocked.
The Kremlin has rejected the claim that Russia is in default. Spokesperson Dmitry Peskov said bond payments have been blocked due to Western sanctions.
Sweeping sanctions by Western countries in response to Russia’s invasion of Ukraine include a ban on the global financial system.
Problems are increasing for the Vladimir Putin Administration after the UK, US, Canada and Japan announced last Sunday a ban on imports of Russian gold, in an effort to hit Moscow’s ability to fund the war in Ukraine.