Russia defaulted on its international bonds for the first time in more than a century, the White House said, as sweeping sanctions have effectively cut the country off from the global financial system, rendering its assets untouchable.
The Kremlin, which has the money to make payments thanks to oil and gas revenues, swiftly rejected the claims and has accused the West of driving it into an artificial default. read more
Earlier, some bondholders said they had not received overdue interest on Monday following the expiry of a key payment deadline on Sunday. read more
Russia has struggled to keep up payments on $40 billion of outstanding bonds since its invasion of Ukraine on Feb. 24.
"This morning's news around the finding of Russia's default, for the first time in more than a century, situates 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," the U.S. official said on the sidelines of a G7 summit in Germany. read more
Russia's efforts to avoid what would be its first major default on international bonds since the Bolshevik revolution more than a century ago hit a roadblock in late May when the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) effectively blocked Moscow from making payments.
"Since March we thought that a Russian default is probably inevitable, and the question was just when," Dennis Hranitzky, head of sovereign litigation at law firm Quinn Emanuel, told Reuters ahead of the Sunday deadline.
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