Russia defaults, PUTIN panics for fear of failing in Ukraine, after Russia defaults

Russia defaults, PUTIN panics to face default after more than a century, he is afraid that there will be no money left to maintain the war | Update on Russia and Ukraine war May 26.Show more

PUTIN feared that it would have to "humiliately" withdraw its troops from Ukraine because there was no money left to sustain the war of aggression.

Russia defaulted on its debt for the first time in more than a century.

It comes after US President Joe Biden cut the Kremlin from paying bondholders after allowing an exemption allowing Moscow to pay international creditors lapsed. In practice, that means US banks and individuals are prohibited from receiving bond payments from Russia.

Regardless of the decision, Moscow will pay around $100 billion (£808 million) by Friday of this week.

The Office of Foreign Assets Control on Wednesday said it "will not renew" the terms that allow Moscow to continue to meet certain financial obligations.

Meaning that the clock is now ticking on the possibility of Russia defaulting on its foreign debt for the first time since the Bolshevik Revolution of 1918.

On Thursday, the Kremlin announced that it would repay its dollar debt in rubles, an option previously rejected by international lenders.

Russian Finance Minister Anton Siluanov said the current situation "has nothing in common" with 1998 when Russia defaulted on $40 billion of its domestic debts due to inability to pay.

He said that Russia was facing a "fake situation created by an unfriendly country", adding: "We are struggling to find a way to pay off this Huge debt.

Moscow will make coupon payments for the three bonds this Friday.

However, the majority of owners are outside the US meaning a settlement can be made.

European banks may stop trading due to fears of US retaliation.

Next month, Russia will pay off the bonds, mostly held by the United States.

If payment is not made then Moscow will enter a 30-day grace period.

It will be assessed as default if payment has not yet been made after the end of this period.

Timothy Ash, emerging markets strategist at BlueBay Asset Management, told The Telegraph that a Russian default was "just a matter of time". Because Russia currently does not have enough money to import more weapons, where does PUTIN get the money to pay its debt.

“Russia will lose almost all market access – even to China – because of this default,” he said.

“That means no financing to Russia [and Russian companies] except at exorbitant interest rates.

"It means no capital, no investment and no growth."

If this happens, it will further reduce Russia's status as a borrower, and the international investors who bought the bonds will also have to pocket millions of dollars.

This was a default after more than a century, but Russia could not avoid it.
PUTIN is facing a nightmare as he has to count down to the time when Russia defaults on debt, he fears for his war in Ukraine, will it suffer a humiliating defeat and have to withdraw its troops home.
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