Article 186: Russia Nears National Default... First Time in 100 Years

Vladimir Putin, President of Russia [Image source=Yonhap News]

[Asia Economy Reporter Buaeri] Reports have emerged that Russia is nearing its first national default in over a century due to Western sanctions following its invasion of Ukraine.

According to Bloomberg and other sources on the 14th, the payment date for interest on Russia's dollar-denominated government bonds amounting to $730 million (approximately 900 billion KRW) is approaching this month. Among these, interest payments of $117 million (approximately 145 billion KRW) on two dollar-denominated bonds must be made by the 16th, drawing global investors' attention.

Bloomberg reported that the Russian Ministry of Finance has initiated related procedures by issuing payment orders. It is not yet known whether the interest will be paid in dollars or rubles. However, Russian Finance Minister Anton Siluanov previously stated that if dollar payments are impossible due to Western sanctions, Russia would repay its debts in rubles.

According to Bloomberg, if Russia repays the interest on the two dollar bonds in rubles on the 16th, it would mark the first foreign currency default since the Bolshevik Revolution in 1917. At that time, the Bolsheviks led by Vladimir Lenin refused to honor the debts of Imperial Russia after overthrowing the Tsar.

Earlier, international credit rating agency Standard & Poor's (S&P) pointed out that repaying debt in a currency other than the agreed one would be considered a default.

Bloomberg reported that if Russia fails to make interest payments or pays in rubles instead of dollars, it could trigger a chain default on foreign currency debts amounting to about $150 billion (approximately 186 trillion KRW) held by the Russian government and companies such as Gazprom, Lukoil, and Sberbank.

This content was produced with the assistance of AI translation services.