Debt default is a term often heard in the international financial market.
However, debt defaults are usually caused by commercial companies or small countries, such as Sri Lanka, which had a serious balance of payments imbalance during this period, and countries such as Greece, which suffered from the European debt crisis in the past few years.
But according to the latest report from Tasmania News Agency, Russia will also face an international debt default, which is the first time since the era of Lenin in 1918.
The most direct reason for debt default is lack of money. Since the outbreak of the war in Ukraine, although Russia has been severely sanctioned by the West, Russia's economic income has not shrunk significantly due to the sharp rise in prices of international energy, grain and other bulk commodities.
According to reports, the amount involved this time is approximately US$100 million, which is not a huge amount of money for Russia.
In fact, Russia has paid the relevant amounts before the repayment deadline. However, because Western countries have kicked Russia out of the international payment system, these payments cannot flow to the accounts of international creditors. This is the reason for this "default" incident. substance.
In other words, this so-called default event is not a financial issue, but a political issue . It was the Western sanctions against Russia that caused Russia to be unable to repay the money. Even if it was repaid, the creditors could not receive it. This is undoubtedly a bizarre event in the history of international finance. After the
incident occurred, Russian Finance Minister Siluanov directly called it a "farce." At the same time, it also stated that if Western countries continue to seize Russian assets on the pretext of so-called "breach of contract", Moscow will regard it as a move to "sever diplomatic relations".
In addition, there is another background to this incident.
Russian President Putin signed a decree last week, establishing a temporary procedure for the payment of foreign currency government debts. The main purpose is to repay European bonds with rubles . The entire repayment will be regarded by Russia as fulfilling its debt repayment obligations.
As of now, Russia has approximately $40 billion in outstanding debt. However, it should be noted that Western countries have banned banks, settlement and clearing systems, depository institutions, etc. from conducting any business related to Russia.
Therefore, paying in rubles is not recognized by Western countries. It is obvious that their purpose is to make Russia default on its debt in order to strengthen its attack on Russia.
Normally, when a country experiences a sovereign debt crisis, its international financing costs will greatly increase, and may even lead to complete inability to obtain financing. This is similar to an individual's debt default, which will make it difficult to borrow money from banks. A truth.
From the perspective of Western countries, allowing Russia to default on its debt will cause a heavy blow to the Russian economy and is likely to cut off the possibility of Russia returning to the international market in the future.
This plan of the West seems very shrewd and very lethal to Russia, but the actual situation is not as optimistic as they imagined. because they forgot that the international market is not the same as the Western market.
Western countries have imposed sanctions on Russia for several months, but Russia's economic operation is still relatively stable. The ruble has risen sharply against the US dollar for four consecutive months, reaching a new high in seven years.
The reason is that Russia's dependence on Western countries is not as high as imagined.
Russia's current international income mainly comes from oil, natural gas , food and other commodities. These are hard currencies in the international market. Western countries do not need them, but they are in China, ASEAN , India, Latin America, Africa and other countries. There is no shortage of sales in regions and regions.
In fact, the sanctions imposed by Western countries on Russia had already occurred before the outbreak of the war in Ukraine, but because of these bargaining chips, Russia already has a strong ability to withstand pressure.
It is indeed a cruel move to kick Russia out of the international payment system, but Russia can trade with economies other than Western countries.
In addition, Russia can also conduct transactions through "barter". has a large amount of natural resources in its hands, so Russia cannot really be kicked out of the international market.
And judging from the current situation, it is quite stupid to kick a big country like Russia out of the international payment system.
The current international financial system is essentially dominated by Western countries. The more economies that are willing to be included in this system, the more stable the West's advantages will be.
Now kicking Russia out of the payment system is a huge blow to the system itself. Furthermore, this so-called "breach of contract" cannot bring any substantial harm to Russia.
The biggest consequence of a country's debt default is that it will no longer be able to borrow money in the international market. However, Russia itself has no intention of continuing to follow the Western-led financial order and is fully prepared for the impact of the incident.
More importantly, there are still many countries that are not liked by Western countries, including Venezuela , Iran and other countries. These countries also have rich natural resources.
Russia's experience will give them a strong sense of crisis, and they will then seek various ways to cut themselves off from the Western-dominated financial system.
Western countries have collectively imposed sanctions on Russia, which looks impressive and seems to be taking a big advantage, but in fact they are poaching themselves.
