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Russia has defaulted on its foreign debt for the first time in more than a century, reports say

Added 06-27-22 03:14:02am EST - “Russia has the money to pay its foreign debts, but sanctions are blocking payments from moving through the global system.” - Businessinsider.com

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Posted By TheNewsCommenter: From Businessinsider.com: “Russia has defaulted on its foreign debt for the first time in more than a century, reports say”. Below is an excerpt from the article.

Russia has defaulted on its foreign debt for the first time in more than a century as the country can't pay creditors due to sanctions over the war in Ukraine, according to media reports.

The country missed a deadline to pay $100 million in dollar- and euro-denominated interest on two foreign-currency bonds on Sunday, The Wall Street Journal reported, citing bondholders.

Russia said it had transferred the bond payment in rubles to the country's National Settlement Depository, Reuters reported last week. But the bonds' covenants do not allow for payments in rubles, which means the payments would still constitute a default. It's also unclear how bondholders can access the ruble payments as Russia's National Settlement Depository has been sanctioned by the EU.

In May, the US Treasury, too, ended a key sanctions exemption that allowed Russian sovereign bond payments to pass through to US investors. In response, Russia said it would start using rubles to pay down dollar bond payments.

This marks Russia's first default on its foreign debt since 1918, when, during the Bolshevik Revolution, communist leader Vladimir Lenin repudiated the debt of the Tsarist era.

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