Ukraine war impact: Russia defaults on overseas debt for 1st time in over a century

According to a Bloomberg report, the $100 million interest payment was due on May 27. Russia has said that the money was sent to Euroclear, a bank which would then distribute the payment to investors. But that payment has been stuck there and creditors have not received it.

Image courtesy: Reuters

Moscow: Russia has defaulted on its overseas debt for the first time in more than a century after missing a deadline, reports suggest. Russia has the money to make a $100 million payment and is willing to pay, but sanctions have made it impossible to get the sum to international creditors, the BBC reported. The Kremlin had been determined to avoid the default, which is a major blow to the nation`s prestige.

The $100 million interest payment was due on May 27. Russia has said that the the money was sent to Euroclear, a bank which would then distribute the payment to investors. But that payment has been stuck there, according to Bloomberg News, and creditors have not received it. The money had not arrived within 30 days of the due date, that is, Sunday evening, and so is considered a default, BBC reported.

Euroclear wouldn`t say if the payment had been blocked, but said it adheres to all sanctions.

The last time Russia defaulted on its foreign debt was in 1918, during the Bolshevik Revolution when the new communist leader Vladimir Lenin refused to pay the debts of the Russian Empire.

Russia`s last debt default of any kind was in the 1998 as the country was rocked by the rouble crisis during the chaotic end of Boris Yeltsin`s regime. At the time, Moscow failed to keep up payments on its domestic bonds but managed not to default on its overseas debt, the BBC reported. Russia has seemed on an inevitable path to default since sanctions were first imposed by the US and European Union following the invasion of Ukraine.

Russia to transfer nuclear-capable missiles to Belarus

Russia will transfer nuclear-capable Iskander-M missile systems to its ally Belarus over the coming months, Russian President Vladimir Putin said. Putin told Belarusian President Alexander Lukashenko at a meeting in St. Petersburg that the missile systems "can use both ballistic and cruise missiles, both in conventional and nuclear versions," according to the Kremlin, CNN reported.

Russia launched its February 24 invasion in part from Belarusian territory, which borders Ukraine to the north. Throughout the war, Moscow has used Minsk as a satellite base including for many of Russia`s air operations in Ukraine, according to intelligence collected by NATO surveillance planes. On Saturday, Ukraine claimed Russian forces had fired multiple missiles on the Kyiv, Chernihiv and Sumy regions from Belarus.

In a transcript of the meeting, Lukashenko expressed to Putin his "stress" over what he alleged are flights by United States and NATO planes "training to carry nuclear warheads" close to Belarus` border, CNN reported.  He asked Putin to consider "a mirrored response" to the flights or to convert Russian fighter jets, which are currently deployed to Belarus, to "carry nuclear warheads."

Putin replied that "there is no need" to match the US flights and suggested Belarus could modify its own Su-25 aircraft to be nuclear-capable instead. "This modernization should be carried out at aircraft factories in Russia, but we will agree with you on how to do this. And accordingly, start training the flight crew," Putin said, CNN reported.