Russia and Belarus are on the verge of default

The World Bank states that Russia and Belarus, which are currently under heavy sanctions from USA and other countries due to war in Ukraine, are close to default. 

This was stated directly to Reuters by the chief economist of the World Bank Carmen Reinhart.

Commentary: chief economist of the World Bank Carmen Reinhart:

«Both Russia and Belarus are in square default territory. They’re not rated by the agencies as a selective default yet, but mighty close.»

She also added that she is worried about what she does not see, because financial institutions are well-capitalized, but balance sheets are often opaque. There is also the problem of default of Russian private sector.

The possibility of Russia’s default on foreign bonds has become a threat because of a series of sanctions and countermeasures by Moscow that have cut the country off from global financial markets. The amount of the bond reaches 40 billion dollars. At the same timeб the agency notes that this is the first such situation since the Bolshevik revolution of 1917.

Currently, about half of Russia’s sovereign bonds belong to foreign investors. Russia is due to repay its $ 107 million debt on March 16. If this does not happen within 30 days, a default will occur on April 15 already.

Source: New Voice


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