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Rouble weakens as Russia slips into sovereign default zone

Added 06-27-22 04:04:02am EST - “The rouble weakened in volatile Moscow trade on Monday as Russia looked set for its first sovereign default in decades after a payment deadline expired before some bondholders had received overdue interest. The grace period on $100…” - News.yahoo.com

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Posted By TheNewsCommenter: From News.yahoo.com: “Rouble weakens as Russia slips into sovereign default zone”. Below is an excerpt from the article.

MOSCOW (Reuters) - The rouble weakened in volatile Moscow trade on Monday as Russia looked set for its first sovereign default in decades after a payment deadline expired before some bondholders had received overdue interest.

The grace period on $100 million interest payments due on May 27 expired on Sunday. The Kremlin says there are no grounds for Russia to default but that sanctions have hampered its ability to send money to bondholders, accusing the West of trying to drive it into an artificial default.

At 0728 GMT, the rouble was 0.5% weaker against the dollar at 53.68, at one point shedding around 2% and touching its weakest since June 21 of 54.4975.

The rouble, which has become by far the world's best-performing currency this year, has been driven by Russia's high proceeds from commodity exports, a drop in imports and a ban on households withdrawing foreign currency savings.

The strong rouble hammers the incomes of export-focused companies and could weigh on the economy as it tips into recession following harsh sanctions over what Moscow calls a "special military operation" in Ukraine.

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