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Russia Defaults on Debt For First Time in a Century

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As Russia prepared to strike Ukraine in the early days of 2022, the world was quick to warn the Kremlin:  Invading a sovereign nation would be grounds for fiscal trouble, and from a united front.

Of course this didn’t have much effect on Vladimir Putin, whose belligerence appears to be fueled by own concerns about mortality.

Now, as the Kremlin runs a global gauntlet of monetary malaise, Russia has defaulted on her first debt since the early 20th century.

Russia defaulted on its foreign-currency sovereign debt for the first time in more than a century after failing to make two payments by the Sunday night deadline.

Moscow missed the deadline to meet a 30-day grace period on interest payments that were originally due May 27, but it could be a while before the default is confirmed.

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The official Russian stance on the subject was predictably nonchalant and defiant.

“There is money and there is also the readiness to pay,” Russian Finance Minister Anton Siluanov said last month. “This situation, artificially created by an unfriendly country, will not have any effect on Russians’ quality of life.”

The U.S. Treasury Department last month ended Russia’s ability to pay back debt to international investors through American banks. The Russian Finance Ministry then said it would pay dollar-denominated debts in rubles and offer “the opportunity for subsequent conversion into the original currency.”

The country owes around $40 billion in foreign bonds, about half of that is owed to foreigners.

As Putin’s war rages in Ukraine, there are still a number of economic measures left in the back pocket of the international community, and there could be more pain coming for the Kremlin in the coming days.

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About the Author:
As a lifelong advocate for the dream promised us in the Constitution, Andrew West has spent his years authoring lush prose editorial dirges regarding America's fall from grace and her path back to prosperity. When West isn't railing against the offensive whims of the mainstream media or the ideological cruelty that is so rampant in the US, he spends his time seeking adventurous new food and fermented beverages, with the occasional round of golf peppered in.