Russia’s first debt default since 1998; How Putin paid hefty price for Ukraine war | Explained

In a bitter culmination of tough Western sanctions over Vladimir Putin's invasion of Ukraine, Russia defaulted on its foreign-currency sovereign debt for the first time in a century. On Sunday, the grace period on about $100 million of snared interest payments due May 27 expired. The deadline is considered an event of default if missed. Russia has pushed back against the default designation, saying it has the funds to cover any bills and has been forced into non-payment. The last time Russia fell into default vis-a-vis its foreign creditors was more than a century ago. During Russia’s financial crisis and ruble collapse of 1998, President Boris Yeltsin’s government defaulted on $40 billion of its local debt. Watch this video for more details.

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[justicija]

What kind of bankruptcy, it is not bankruptcy, but the US aggressor refuses to accept Russian money. By the way, Russia is the least indebted country in the world, the United States has a public debt of 150%, Japan 200%, and Russia 17%.

[VikramSingh-jjbk]

Western countries are playing dirty,

No one should keep their forex reserves and gold reserves there, it's UNSAFE

[snackattack]

they are not allowed to pay that's different then the F media tells

[marvib]

I think most do not understand that the negative impact will be suffered not by Russia but by the creditor country or govt that lent the funds to Russia. They won't be able to get back the sum promised to be paid. They have to write it off as loss in their financial statements. Now who is having some headaches? The creditor!😭

[bennyng]

It's not a debt default pls. It's a situation where Russia is not allowed to use its own money to pay its debt. Sanctions are not recognised in international law. There'll be plenty of law suits awaiting the US govt for orchestrating sanctions that does not apply in international law.

[brightsunshine]

Simple logic … You took money from bank as loan but bank doesn’t allows you to payback loan interest by keeping its door shut for 24 hours.. Now the culprit is the BANK and the loser is the CREDITOR..

[nishsingh]

How on earth is Russia suppose to pay the interest on the debts when you stopped all the international routing payment methods for them, primarily the SWIFT mode? Also I came across somewhere they asked for the payment through Rubel which they didn't agreed initially.

[johnbest]

If lender's money is blocked by a third party known to the lender and the debtor is ready and willing to execute but has no other means to do so, this is not a default. It becomes a case of "Force Majeur" and the creditor can take the party that is stopping the payment go through to court....

Since when a company gave a payment method to a client and complain to the client that it is their fault that the money they are sending through the company's payment method is not working...???

Investors in Russia will have to accept to be paid in Russian Rubles or Chinese Yuan..full stop...

[kvgevargheseGKV]

FYI they didn't default they paid in ruble ...

[lilacer]

it is not a debt default. Russia has the money to pay. it is the financial system of the west that is blocking the payments.

[facelessgod-kgxk]

Russia has ability to pay but west play dirty game

[tazanddo]

We're going to freeze all your overseas money and not let you pay anybody, in any way! Hey! You didn't pay us what you owed us! Z 🇷🇺

[haneylondhe]

Good now now Putin should start gold standard banking system again

[rajibdeka]

When your creditor says that you can't pay him even if you have money... That's what this is. Russia has the money but creditors will not accept. .😁😁

[sreenavenugopalan]

If you don't allow the debtor to pay.. because creditors are being illogical.. than the only creditors lose..

[madmantheory]

If a full fledged war scenario there is no debt and no defaulters only survivors.

[vinaykumarrjs]

It's artificial default and they have already paid in rubles which best performing currency of the decade. Have a break

[sreenavenugopalan]

What a funny business they have money.. if you don't accept their money what can they do.. 😳I don't understand the world anymore! 🤷‍♀️

[samuelweir]

"But Russia does not consider itself in default because its payments have been blocked by Western sanctions."

Yeah, sure, Russia. You tell that to your debt holders who expected to be paid. If you're unable to pay them on time for ANY reason (including reasons of your own making) then you're in default..

[sanjibmoitra]

$40 billion dollar is peanuts for Russia as the country has largest fossil fuel reserve with untapped potential.Largest gold reserve and as well as largest number of potential diamond mines.Best quality coking coal available in the world.Largest exporter of wheat.Great iron ore reserve.Foreign Exchange reserve of $598 billion dollars though frozen in overseas.So for the propaganda purpose it seems okay but in reality Russia can pay without much hassles rather on a twinkle of an eye all the foreign as well as domestic debt.Russian leadership knows it and others in world echo it.