Reuters/Marc Jones/3-16-2022
“Moscow is due to pay $117 million in interest on two dollar-denominated sovereign bonds it sold in 2013. But the limits it now faces in making payments, and talk from the Kremlin that it might pay in roubles – triggering a default anyway – has left even veteran investors guessing at what might happen.”
USAGOLD note: Even if a ceasefire is agreed, we have no idea how it will affect the sanctions already imposed, and whether Russia would at that point reconsider paying its debts in roubles. As it stands, Russia’s creditors will face the prospect of default sometime within the next 30 days when the grace period on current interest payments ends. The possibility of a default and contagion also plays into the Fed’s ability to pursue a more hawkish tilt in monetary policy.
