Russia defaults on foreign debt for first time since 1918: What to know

Russia has defaulted on its foreign currency debt for the first time in more than a century, as tough Western sanctions designed to punish Moscow for invading Ukraine restrict its ability to pay overseas creditors.

The country has the cash but is unable to get it to creditors because sanctions have cut Russia out of international payment systems. A deadline for an overdue $100 million interest payment expired Sunday. Russian President Vladimir Putin had proposed paying creditors in rubles, which could then be converted to dollars, after the U.S. Treasury Department closed a loophole that had allowed the Kremlin to make debt payments owed to American bondholders through American banks.

Russian senator Vladimir Dzhabarov rejected reports of the default on Telegram, calling the West hypocritical and accusing Western banks of stealing huge amounts of Russian money.

The last time Russia defaulted on its foreign debt was in 1918, during the Bolshevik Revolution, when the Bolsheviks ousted Czar Nicholas II and refused to accept international debts accumulated during the Czarist era.

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