Russia Defaults On Foreign Debt For The First Time In 104 Years

Hamilton Nwosa
Writer
The EU Is Prepping Another Round Of Sanctions Against Russia

Ad

[FULL LIST] University of Ibadan Reclaims Crown as Nigeria’s Best Institution for 2026

By Abiola Olawale The University of Ibadan (UI) has surged back to the pinnacle of Nigerian higher education, clinching the title of the nation's top university in the Times Higher Education (THE) World University Rankings 2026. The development marks a return for UI, which dropped to fourth place in the previous year's assessment but now…

Experts React as FG, World Bank Clash Over Nigeria’s Poverty Figures

By Obinna Uballa A new poverty report by the World Bank has sparked a wave of controversy in Nigeria, with the Federal Government dismissing it as “unrealistic” and experts insisting that the figures, however grim, reflect the lived experiences of millions of citizens. The World Bank’s Nigeria Development Update released this week estimates that 139…

Israel, Hamas Greenlight First Phase of Trump’s Peace Plan

By Abiola Olawale Israel and Hamas have inked their approval on the inaugural phase of the United States President Donald Trump's Gaza peace initiative. The agreement, announced on Wednesday amid high-stakes indirect talks in Egypt, paves the way for an immediate ceasefire, the release of hostages, and a surge in humanitarian aid. This development is…

Ad

  • Russia has just defaulted on foreign debt obligations for the first time in over a century.
  • Putin’s invasion of Ukraine has sparked retaliation in the form of economic sanctions, weighing on Russia’s ability to pay foreign investors.
  • The efficacy of western sanctions hitting the Russian economy has been watered down as Europe continues to buy Russian energy.

Russia has defaulted on its foreign debt obligations for the first time since the Bolshevik revolution in 1918.

Sanctions launched by an alliance of western nations in response to president Vladimir Putin’s invasion of Ukraine have hobbled the Kremlin’s access to its assets, meaning it has been unable to pay foreign investors.

Moscow missed a grace period deadline today on a $100m interest payment that was originally due on 27 May, tipping the country into default for the first time in over a century.

A US official said at today’s G7 summit that the default shows “just how strong the actions are that the U.S, along with allies and partners have taken, as well as how dramatic the impact has been on Russia’s economy”.

Russia insisted it has the means to fulfill its foreign debt obligations and blamed sanctions for leaving creditors out of pocket.

The Bolsheviks stopped paying foreign investors in the early 1900s amid the Russian civil war to keep assets in the country to strengthen the economy.

Related: New EV Battery Boasts 1,000km Range

America’s Treasury department blocked Russia from making payments last May, effectively sealing its fate of falling into default.

Earlier this year, the world’s top rating agencies downgraded Russian debt to among the lowest wrongs on their debt safety ladder.

The efficacy of western sanctions hitting the Russian economy has been watered down by European countries continuing to send money to the country in exchange for Russian energy.

Persistently high demand for Russian gas has lifted the rouble after it initially plunged against the world’s leading currencies following Moscow’s invasion.

However, US president Joe Biden, UK prime minister Boris Johnson and other leaders of G7 countries over the weekend said they are pursuing a cap on Russian energy prices to curb revenues flowing into Moscow.

NB: CityAM wrote this article for oilprice.com

Ad

Unlocking Opportunities in the Gulf of Guinea during UNGA80
X whatsapp