Russia risks defaulting on its foreign debts within weeks Business

This has led Moscow to exploit the dwindling pile of dollars it holds domestically, making the cost of imports more expensive and potentially fueling inflation in the country, which has already hit multi-decade highs. .

Russia was forced to turn around last week after a month-long stalemate over $650 million in eurobond coupon payments that became due on April 4.

He first tried to make the payments using his frozen overseas reserves, then tried to pay creditors with roubles, a decision that was rejected. Last Friday he announced payments were being made from national reserves, with the money arriving Tuesday with Western investors.

Timothy Ash, strategist at BlueBay Asset Management, said: “Had Russia defaulted, even friendly countries like China would likely have been reluctant to lend to Russia except at very high interest rates.

“A default would indeed be a huge long-term negative for Russia – keeping borrowing costs high, dampening investment and growth, and lowering living standards.”