Free Republic

Russia was poised to default on its foreign debt for the first time since 1918, pushed into delinquency not for lack of money but because of punishing Western sanctions over its invasion of Ukraine. Russia was likely to miss payments on two foreign-currency bonds late Sunday, according to holders of the bonds who had yet to see funds deposited. The day marks the elapse of a 30-day grace period since the country was due to pay the equivalent of $100 million in dollars and euros to bondholders.

Russia’s finance minister said the country would fulfill its debt obligations but would issue payment in rubles until Western nations unfreeze its foreign-currency reserves. The announcement comes ahead of payments due to be made Wednesday on two Russian government dollar bonds. Under the terms of those two specific bonds, payments can only be made in dollars, meaning ruble payment could set the stage for a default on its dollar debt. Bonds typically also have a 30-day grace period for payment.