Russia is facing effective bankruptcy as soon as Wednesday after the World Bank warned that crippling sanctions have left the Kremlin “mighty close” to a default on its foreign debts.
Carmen Reinhart, chief economist at the World Bank, said that Russia and Belarus are now in “square default territory”, with payments on about $40bn of Moscow’s external bonds at risk.
Analysts fear the country will fail to make a $117m (£89m) coupon payment on a sovereign eurobond next week. It will have a 30-day grace period to pay up, but may be deemed to have defaulted if it attempts to pay in roubles.
EU leaders meet in Versailles to discuss the Ukraine war and energy independence
Foreign investors hold about half of Russia’s currency-linked bonds, leaving banks that bought debt from Moscow potentially exposed to multi-billion-dollar losses as a result. France is most at risk, with $4.5bn of Russian government bonds held by the country’s lenders.
Read more: The Telegraph
