THE Kremlin today insisted that there are “no grounds” to say Russia defaulted on its foreign-currency sovereign debt, as the West pummels Russia with sanctions over its Ukraine offensive.

“There are no grounds to call this situation a default,” said Kremlin spokesman Dmitry Peskov, after a key payment deadline expired yesterday.

“These claims about default, they are absolutely wrong,” he said, adding that Russia settled the debt last month.

Bloomberg News earlier today reported that Russia defaulted on its foreign-currency sovereign debt for the first time in more than a century, after the grace period on US$100 million (RM440 million) of interest payments due yesterday had expired.

Russia accused the West of seeking to drive Moscow into an artificial default, and Finance Minister Anton Siluanov dismissed the situation as a “farce”.

Punishing Western sanctions on Russia have largely severed the country from the international financial system, making it difficult for Moscow to service its debt.

The country last defaulted on its foreign currency debt in 1918, when Bolshevik revolution leader Vladimir Lenin refused to recognise the obligations of the deposed tsar’s regime.

It defaulted on ruble-denominated debt in 1998 amid a broader financial crisis. – AFP, June 27, 2022.