Russia’s sovereign default is no longer an “unlikely event” as economic sanctions prevent the country from using its foreign exchange reserves to repay debt, as the head of the International Monetary Fund (IMF) Kristalina Georgieva has told Bloomberg.
She believes that Russia may announce a default already this week.
The Russian Finance Minister Anton Siluanov has previously said the total amount of gold and foreign exchange reserves is about $640 billion, but about $300 billion of this amount was frozen due to sanctions imposed by the US, the EU and their allies.
For this reason, Russia has had problems with the fulfillment of obligations, including debt, so the country plans to pay sovereign debt, including those denominated in foreign currency, in rubles. Siluanov said:
“We do not refuse to fulfill state obligations, we will pay them in rubles until the moment when our gold and foreign exchange reserves are unfrozen.”