Russia is technically bankrupt
The deadline for Russia to pay part of its foreign debt has passed. Thus, the country has technically become bankrupt.
Russia has defaulted on about $100 million in payments denominated in dollars and euros. The deadline was May 27, and a 30-day grace period also expired Sunday night. Washington and Moody’s announced that the country was thus formally bankrupt. French banks, which held about 4.5 billion dollars of Russian government bonds at the end of last year, will be the biggest losers. Moreover, it will be difficult for Russian companies to get foreign financing.
Russia did not repay the debt because it was not technically possible. It is prevented from doing so by the sanctions of the USA and the European Union. Russia’s foreign debt amounts to $57 billion. The last time it made a repayment in currencies was in May, when it still had access to money in American banks.
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