Russia Defaults on Foreign Currency-Denominated Sovereign Debt for the First Time in 104 Years

[Asia Economy Reporter Kim Hyun-jung] Due to Western economic sanctions following the invasion of Ukraine, Russia has defaulted on its debt payments for the first time in a century by failing to pay interest on its government bonds.

Bloomberg reported on the 27th (local time) that Russia was supposed to pay investors approximately $100 million (about 129.3 billion KRW) in foreign currency-denominated government bond interest by the agreed date, which was the previous day, but failed to do so. The original payment date for this interest was the 27th of last month, but a 30-day grace period was applied until the default occurred on this day.

Bloomberg also reported that Russia's default is the first in 104 years since 1918, and that in 1998, Russia declared a moratorium on debt payments.

Hassan Malik, Chief Country Analyst at Loomis Sayles & Company, stated, "It is very rare for a financially capable government to be forced into default by external factors," adding, "This will be one of the most significant watershed defaults in history."