A statement published by Moody’s on Monday stated that Russia has defaulted on its foreign debt.

The statement read that "On 27 June, holders of Russia's sovereign debt had not received coupon payments on two Eurobonds worth $100 million by the time the 30-calendar-day grace period expired, which we consider an event of default under our definition.”

The US permitted its license to pay bondholders to expire in May, allowing Russia to repay its foreign debt. Last week, Russia paid its Eurobond coupon in rubles for the first time via a new procedure.

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Sanctions-hit Russia announced that two of its debt payments had not been transferred to creditors, but it denied that this constituted a default.

According to the Russian Finance Minister, Anton Siluanov, international settlement and clearing systems "received funds in full in advance," but the payments were not transferred to the final recipients due to "the actions of third parties."

US pushes Russia toward "technical default"

Russia's State Duma Speaker Vyacheslav Volodin announced on May 25th, after the US blocked Russia from making sovereign debt payments to US bondholders, that Moscow will make its foreign debt payments in rubles, according to RT.

The Speaker further said, on the same day, that Russia currently has the necessary monetary resources to make these payments.

The Russian Finance Ministry confirmed that Moscow will continue to fulfill its debt obligations, despite the US' recent decision, saying that the decision "infringes...on the rights of foreign investors in Russian debt instruments and undermines confidence in the Western financial infrastructure." 

It further affirmed its readiness to continue "repaying all debt obligations."

The Russian government has accused the West on June 26 of attempting to artificially force Moscow into default, and Finance Minister Anton Siluanov has dismissed the situation as a "farce."

Western sanctions against Russia have effectively cut the country off from the international financial system, making it difficult for Moscow to service its debt.

Russia was set to make its first interest payment on its foreign debt in March, the first since the West imposed sanctions on Moscow over Ukraine.

Moscow is due to pay $117 million on two dollar-denominated bonds.

Sanctions imposed in response to the war Ukraine have targeted $300 billion of the country's foreign currency reserves kept overseas. 

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