Russia defaults on debt for first time in century

STORY: Russia has defaulted on its sovereign bonds for the first time since the Bolshevik revolution over a century ago.

Some bondholders said Monday (June 27) that they had not received overdue interest payments.

The deadline for making those payments passed a day earlier.

Russia has struggled to keep up payments on $40 billion in outstanding bonds since sanctions were imposed on it over the war in Ukraine.

The Kremlin says it’s not for lack of money.

It blames restrictions that make it impossible to send payments to bondholders.

Moscow accuses the West of trying to drive it into an artificial default.

Since late May the U.S. Treasury Department has effectively blocked Russia from making international payments.

For now any default will be largely symbolic though.

Russia can’t borrow internationally at the moment, and doesn’t need to thanks to plentiful oil and gas revenues.

However, the stigma of default is likely to raise its borrowing costs in the future.

The payments in question now concern $100 million in interest on two bonds.

A U.S. official said Monday that the default showed how severely sanctions were affecting Russia.