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West pushes Russia into its first foreign debt default since 1918 - CNN
Jun 27, 2022 1 min, 8 secs

Russian Finance Minister Siluanov was quoted by state-owned news agency Ria Novosti as saying last week that the sanctions meant Moscow had no "other method left to get funds to investors, except to make payments in Russian rubles."

The Russian finance ministry said in a Telegram post on May 27 that the Russian National Settlement Depository had made the required payments of $71 million and €26.5 million.

"Allegations of default are incorrect because the necessary currency payment was made as early as back in May," Kremlin spokesman Dmitry Peskov said during a regular call with reporters on Monday.

The fact that money transferred to Euroclear was not delivered to investors was "not our problem," he said.

"So there are no grounds to call it a default," he said.

Euroclear can't settle any securities with counterparties that are subject to sanctions.

Since 2014, the last time the West sanctioned Russia over its annexation of Crimea, the Kremlin had built up about $640 billion in foreign reserves.

About half of those funds are now frozen under Western sanctions imposed after the invasion of Ukraine.

It's not clear what effect — if any — the default will have on Russia's economy in the near term, as the country is already unable to borrow abroad and its existing bonds have collapsed in value to pennies on the dollar.

But in the long term, Russians will almost certainly suffer.

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