It is predicted that Russia will soon default on its debt. The photo shows the Lugansk region of Ukraine, where the war between Russia and Ukraine continues. /Picture=Reuters Russia is expected to default on its debts soon.
US media outlet Bloomberg reported on the 15th that Russia is imminent to declare a US$150 billion default. According to reports, Russia has to pay $117 million in interest on dollar bonds by the 16th.
In response to this situation, Russia is planning to pay interest in its own currency, the ruble. However, the ruble is not an international currency. Therefore, it is unlikely that international financial markets will accept Russias request.
If Russia does not pay interest on bonds in dollars, a grace period is given until the 15th of the next month. However, if it fails to pay the interest even after that, the international financial market is expected to regard Russia as de facto declaring a default.
Of course, if you pay the interest by the 15th of the next month, the default will be avoided. However, it is unlikely that Russia, which has been subjected to economic sanctions from the West, will repay it. Credit rating agencies around the world are already seeing Russias default as an established fact. The so-called worlds top three new rating agencies evaluate Russias rating as a rating just above the default.
