Fears of first Russian debt default for a century as interest payments deadline missed
Russia has reportedly missed a Sunday night deadline to pay interest payments, raising the prospect that it might default on its foreign debt for the first time since the 1917 Bolshevik Revolution.
Such a move would further alienate the country from the global financial system amid its war in Ukraine.
Some Taiwanese holders of Russian Eurobonds have not received interest due on May 27 after a grace period expired on Sunday evening, two sources said. Moscow had been due to make $100 million (€94.6 million) in coupon payments on two Eurobonds.
But it could take time to confirm a debt default.
Early on Monday markets, however, seemed unfazed. Asian shares advanced after Wall Street ended a rare winning week, capped by a 3.1% gain on Friday for the benchmark S&P 500. US futures and oil prices also were higher.
Optimism over China’s progress in controlling coronavirus outbreaks, as schools and businesses reopen, was also fueling buying, analysts said.
The Kremlin owes about $40 billion (€37.8 billion) but has been shut out of the international financial system since its full-scale invasion of Ukraine in late February.
Last month, the US Treasury Department ended Russia's ability to pay its billions in debt back to international investors through American banks. In response, the Russian Finance Ministry said it would pay dollar-denominated debts in rubles and offer the opportunity to convert into the original currency.
Russia calls any default artificial because it has the money to pay its debts but says sanctions have frozen its foreign currency reserves held abroad.
Tim Ash, senior emerging market sovereign analyst at BlueBay Asset Management, tweeted that the default “is clearly not" beyond Russia's control and that sanctions are
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