What Russia’s foreign debt default means for the world


Moscow had failed to pay about $100 million in interest on two bonds during a 30-day grace period that expired Sunday. Essentially, Russia’s creditors hadn’t received payments and Moody’s credit agency said that the missed deadline “constitutes a default.” It also predicted Russia would default on more payments in the future. While Russia regards any default as a fabrication created out of Western sanctions, Straight Arrow News contributor Peter Zeihan argues the global fallout is very real.

Excerpted from Zeihan’s June 29 newsletter, “Zeihan on Geopolitics”:

U.S. bond rating service Moody’s announced that Russia was in default of its foreign debt payments yesterday, a first for Moscow since 1918. Unlike most countries who go into default, Russia has the money to pay its debts. But the sanctions put in place following the invasion of Ukraine, Moscow does not have a reliable mechanism to deliver payment to its debt holders. While the Russian central bank is trying to argue that this does not constitute a technical default, the episode does highlight some of the particularities of the approach the U.S. and its allies are taking in sanctioning Moscow and the rest of the world is taking note.