Global Market Bulletin
  • Home
  • Stock Market News
  • Investing
  • Economy
No Result
View All Result
SUBSCRIBE
Global Market Bulletin
  • Home
  • Stock Market News
  • Investing
  • Economy
No Result
View All Result
Global Market Bulletin
No Result
View All Result
Home Economy

Russia on Verge of $150B Debt Default as Sanctions Cripple Economy

by Global Market Bulletin
March 16, 2022
in Economy
0
Russia on Verge of 150B Debt Default as Sanctions Cripple Economy
74
SHARES
1.2k
VIEWS
Share on FacebookShare on Twitter

Russia debt of $117M in interest on two dollar-denominated bonds has the nation on the verge of defaulting over $150B in debt amid the current war in Ukraine.

You might also like

Understanding Macroeconomics At Scale

Ultimate Guide to Capital Gains Tax – Everything You Need To Know

German Economy Near Potential Winter Recession

Russian Economy Near Collapse With $150B Debt Default Looming

The Russian economy is at risk of a collapse and defaulting on over $150 billion in debt as a result of financial sanctions from the United States and European allies. The sanctions have put immense pressure on the Russian economy, which is already struggling due to low oil prices and the ongoing conflict in Ukraine. If Russia defaults on its debt, it could have a significant impact on the global economy.

The invasion of Ukraine by Moscow nearly one month ago was the biggest attack on a European state in decades. This elicited economic penalties from Western nations, including preventing the Central Bank of Russia from selling dollars, euros and other foreign currencies in its reserve stockpile. This is a key part of its $630 billion reserve.

The downgrade in Russia’s credit rating by international agencies has been attributed to the financial fallout of sanctions. These sanctions have caused a “huge shock to Russia’s credit fundamentals,” according to Fitch. It is possible that additional sanctions will be imposed in the future.

After Russia was removed from the Swift financial system and its currency reserves were frozen by the West, its central bank increased its key interest rate to 20%.

The Kremlin is now due to pay $117 million in interest on two dollar-denominated bonds on Wednesday. If it fails to make those payments, it will be Russia’s first default on foreign debt since the 1917 Bolshevik Revolution. This would be a major embarrassment for Putin’s government.

Current Russian Debt

The Bank of Canada and Bank of England estimate that the total value of government debt in default around the world was about $443.2 billion in 2020, or roughly 0.5% of world public debt. This is an increase from previous years, likely due to the Covid-19 pandemic.

Russian Finance Minister Anton Siluanov said Monday that Moscow will repay creditors in rubles and possibly the Chinese yuan until the sanctions are lifted, with the sanctions preventing the nation from accessing its reserve of dollars and euros. The ruble has depreciated sharply since Russia attacked Ukraine. As of Wednesday morning, 107 rubles were worth $1.

Siluanov said that Russia has to pay coupons on its eurobonds and has already asked Western banks to proceed with the transactions.

“Is that a default?” Siluanov asked during an interview with Russian state news. “From Russia’s point of view, we are fulfilling our obligations.

Some people argue that paying dollar-denominated bonds in rubles constitutes a default. It is unclear whether Russia will be viewed as defaulting on its debt if it pays in rubles. Siluanov accused Western nations of orchestrating the sanctions with the intention of creating a default that “has no real economic grounds.” This could have serious consequences for the Russian economy.

During an interview on Sunday with CBS News, head of the Washington-based International Monetary Fund Kristalina Georgieva stated that a Russian default is no longer “improbable” adding, “Russia has the money to service its debt, but cannot access it.”

If Russia fails to make its debt payment, it has a 30-day grace period. However, if Moscow indicates that it does not intend to pay its debt, credit rating agencies may declare Russia to be in default before the final deadline. The Russian central bank is meeting again on Friday in an attempt to prevent a complete financial crisis.

Tags: Global EconomyRussian Economy
Share30Tweet19
Global Market Bulletin

Global Market Bulletin

Global Market Bulletin is a leading provider of stock market updates, economic news, and personalized investing guides. Our team brings you the latest global financial information to help you make smart investment decisions.

Recommended For You

Understanding Macroeconomics At Scale

by Global Market Bulletin
April 5, 2022
0
Understanding Macroeconomics At Scale

Macroeconomics is the study of the behavior or trends in aggregate economic activity, such as an economy's growth and inflation rate. The term was first used around 1870...

Read more

Ultimate Guide to Capital Gains Tax – Everything You Need To Know

by Global Market Bulletin
April 1, 2022
0
Ultimate Guide to Capital Gains Tax - Everything You Need To Know

What are capital gains taxes? Do I have to pay them? How do you calculate the amount owed? If you've ever wondered any of these questions then this...

Read more

German Economy Near Potential Winter Recession

by Global Market Bulletin
December 14, 2021
0
German Economy Near Potential Winter Recession

Germany is teetering on the verge of recession this winter, with supply shortages and a wave of new coronavirus infections stifling the economy. According to projections published Tuesday...

Read more

Why The Annual Federal Budget Deficit is Critical to Economic Success

by Global Market Bulletin
August 27, 2021
0
Why Annual Federal Budget Deficit is Critical to Economic Success

The budget deficit is not an issue that many people want to discuss. Yet, it is an integral part of the U.S. economy and without it, would cause...

Read more

Related News

Endeavor-Release-2021-Results-with-$5-Billion-in-Revenue,-Best-UFC-Year-Ever

Endeavor Release 2021 Financial Results with $5 Billion in Revenue, Best UFC Year Ever

March 16, 2022
Understanding Macroeconomics At Scale

Understanding Macroeconomics At Scale

April 5, 2022
What Time Does The Stock Market Open? What You Need To Know

What Time Does The Stock Market Open? What You Need To Know

March 9, 2022

Browse by Category

  • Direct Offering News
  • Economy
  • Investing
  • Stock Market News

ABOUT US

Global Market Bulletin

Global Market Bulletin is a leading provider of stock market updates, economic news, and personalized investing guides.

QUICK LINKS

  • Stock Market News
  • Direct Offering News
  • Investing
  • Economy

RECENT POSTS

  • The Driving Forces In The Market Today
  • Understanding Macroeconomics At Scale
  • Ultimate Guide to Capital Gains Tax – Everything You Need To Know

GET EMAIL MARKET UPDATES

Subscribe to our mailing list to receives daily updates direct to your inbox!

© 2021 Global Market Bulletin. All Rights Reserved.

No Result
View All Result
  • Home
  • Stock Market News
  • Investing
  • Economy

© 2021 Global Market Bulletin. All Rights Reserved.

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?