Russia Defaults on Debt Payments: Banking Sanctions Update for June 26-July 2, 2022

On Monday, Russia defaulted on its foreign debt for the first time since 1918, after missing  payments on two foreign-currency bonds on Sunday.

According to the Wall Street Journal, Monday “marks the expiration of a 30-day grace period since the country was due to pay the equivalent of $100 million in dollars and euros to bondholders.”

As Barron’s noted, “the default is a logical consequence of freezing Russia out of the global banking system. The country has the money – oil and gas payments are still flowing in with little interruption – it’s just not allowed to transfer the funds to creditors.”

However, due in part to high oil prices, a strong ruble and lowering interest rates, Russia’s economy remains resilient despite the default.

Related sanctions news:

• The U.S. and Britain Will Ban Imports of Gold From Russia (New York Times)
• Russia and China Brewing Up a Challenge to Dollar Dominance by Creating a New Reserve Currency (Business Insider)

Visit the RMA Russia Banking Sanctions Content Hub