Russia defaulted on its foreign debt and failed to pay off bonds that matured on Sunday (), when the grace period for the payment of approximately US$ 100 million in interest on two debts that originally matured on the day of May. The default was already expected amid sanctions imposed on the country after the start of the war in Ukraine. The last time a similar default occurred by Russia was in 1918, when Vladimir Lenin failed to pay the empire’s debt Russian.
Recently Russia recognized that its economy must change as a result of unprecedented Western sanctions in retaliation for the invasion of Ukraine to avoid going back to the times of the Soviet Union. For this, the country must reduce dependence on exports and encourage private initiative, according to the Russian Central Bank. “External conditions changed a long time ago, if not forever,” said Central Bank of Russia (BCR) president Elvira Nabiulina at a conference at the International Economic Forum in St. Petersburg.
“We need to respond to these changes proactively”, stressed Nabiulina, at a time when the Russian BC itself predicts for 2022 the worst recession since
. The forecast for a drop in GDP is between 8% and 10%, although the Central Bank of Russia has already announced that it will revise forecasts upwards in July.