Russia could default on its debt within days

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https://www.cnn.com/2022/03/14/investing/russia-economy-default/index.html

Russia could default on its debt within days
By Charles Riley, CNN Business
Updated 12:47 PM ET, Mon March 14, 2022

London (CNN Business) Russia has sent the clearest signal yet that it will soon default — the first time it will have failed to meet its foreign debt obligations since the Bolshevik revolution more than a century ago.

Half of the country's foreign reserves — roughly $315 billion — have been frozen by Western sanctions imposed after the invasion of Ukraine, Russian finance minister Anton Siluanov said on Sunday. As a result, Moscow will repay creditors from "countries that are unfriendly" in rubles until the sanctions are lifted, he said.

Credit ratings agencies would likely consider Russia to be in default if Moscow misses payments or repays debt issued in dollars or euros with other currencies such as the ruble or China's yuan. A default could drive the few remaining foreign investors out of Russia and further isolate the country's crumbling economy.

The default could come as early as Wednesday, when Moscow needs to hand over $117 million in interest payments on dollar-denominated government bonds, according to JPMorgan Chase. Although Russia has issued bonds that can be repaid in multiple currencies since 2018, these payments must be made in US dollars.