Bloomberg reported that Russia defaulted for the first time since 1918

According to the agency, the grace period for the payment of about $100 million in overdue payments on government bonds expired overnight.In RUSSIA, the default was called “artificial” and many times they declared their readiness to service external debt

On the night of June 27, for the first time since 1918, Russia defaulted on sovereign debt in foreign currency, writes BLOOMBERG.

Default is the default of the debtor to pay the debt. The declaration of default by the state reduces its credit ratings - it becomes difficult or impossible for the country to attract new loans, as a result, the limited infusion of external capital hinders the development of the economy.

According to the agency, the grace period for about $100 million in late payments on government bonds expired on Sunday, and in the event of a default, the deadline is considered a default event. At the same time, Bloomberg points out that "the default is mostly symbolic and means little to Russians."

RBC turned to the Russian Ministry of Finance for a comment.

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We are talking about DOLLAR bonds of the Ministry of Finance, the balance of which for $552 million Russia was supposed to pay off on April 4. However, at that time , the United States blocked Russia's ability to pay its debts from frozen reserves, and the Ministry of Finance initiated the fulfillment of the obligation in rubles. Western market participants prepared to default on these bonds, citing an uncoordinated change in the currency of payment, but the Ministry of Finance at the end of April still managed to bring funds in dollars to foreign investors (according to Bloomberg, the dollar accounts of the mortgage corporation, free from encumbrances, were used for this " Dom.RF”).

On May 11, the former holders of these bonds, who received the payment of principal by May 2, filed a notice of Russian default with the Euroclear clearing system, citing the fact that they did not receive additional interest accrued for the period from April 4 to the date of the actual bond redemption. Russia, when paying off the principal at the end of April, did not include this additional interest in its payment, they argue. “Following the demand of the paper holders, Russia never paid this interest,” the creditors pointed out.

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Peskov announced the plans of the West to push Russia into an artificial default

In April, the US banned Russia from servicing foreign debt by failing to renew a license that allowed holders of Russian sovereign bonds to receive payments. This license expired on May 25th. London Citibank then refused to act as a payment agency for Russian dollar issues, and the Ministry of Finance transferred these functions to the National Settlement Depository (NSD). In early June, NSD also came under EU sanctions.

After the sanctions against the national depository, the Kremlin announced attempts by Brussels to push Russia towards an "artificial default". Siluanov called the creation of artificial barriers to service Russia's public debt a farce. “You can declare anything and try to hang a label. But everyone who understands understands that this is not a default,” the minister stressed. In his opinion, it would be appropriate to call a default in this situation the refusal of foreign financial intermediaries to fulfill their obligations, since this "damages the business reputation of Western financial institutions."

On June 22, President Vladimir Putin signed a decree on the payment of foreign currency debt in rubles. For this purpose, ruble accounts of type “I” were opened for all foreign investors without their personal presence. The next day, the Ministry of Finance paid off Eurobonds in rubles for the first time under the new scheme.

At the end of 2021, Russia's public debt amounted to ₽20.9 trillion - 18.1% of the country's GDP, according to the Accounts Chamber. Domestic debt amounted to ₽16.5 trillion. External debt in foreign currency reached $59.7 billion.

The volume of the external debt of the Russian Federation, according to the Bank of Russia, amounted to $478.2 billion as of January 1, 2022. This amount takes into account not only the debts of the public sector, but also private companies that borrow money from foreign markets.