April 09, 2022

Explainer: Clock ticks down towards a Russian default

Featuring Elina Ribakova

Source: Reuters

Russia faces its first sovereign external default in over a century after it made arrangements to make an international bond repayment in roubles earlier this week, even though the payment was due in U.S. dollars.

S&P on Saturday lowered the country's foreign currency ratings to "selective default" on increased risks that Moscow will not be able and willing to honour its commitments to foreign debt-holders.

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Analysts say Russia has the means and ability to pay. The country receives billions in U.S. dollars in revenue from energy exports, and while around half its foreign exchange reserves are frozen, it has hundreds of millions that are not.

Elina Ribakova, deputy chief economist at the Institute of International Finance, said this was likely a "willingness-to-pay situation."

Read the full story and more from Reuters.

Authors

  • Elina Ribakova

    Adjunct Senior Fellow, Energy, Economics, and Security Program

    Elina Ribakova Ribakova directs the IIF’s economic research on emerging markets, with special interests in Russian economics and financial stability. Ms. Ribakova was previou...