Russia defaulting on its foreign debt proves that sanctions are working and should be further ramped up, Head of the Office of the President of Ukraine Andriy Yermak said in a Telegram post on June 27.
“Anti-Russia sanctions work, therefore they should be tightened,” said Yermak.
“For the first time since 1918, Russia has defaulted on sovereign debt denominated in foreign currency. Sanctions have cut off ways (for Russia) to pay its creditors abroad.”
According to Yermak, June 26 was the deadline for Moscow to make interest payments worth around $100 million. Missing these payments constitutes a default.
“Sanctions on the entire Russian banking sector are called for; it’s important to impose them now,” he added.
Bloomberg reported that Russia has defaulted on its sovereign, foreign currency-denominated debt, for the first time since 1918. Despite having enough cash reserves to make the payments, Western financial sanctions prevent Moscow from actually executing the necessary transfers.
An earlier decree by Russian dictator Vladimir Putin mandated all future Russian sovereign debts be paid in rubles.
Nevertheless, the Russian Finance Ministry kept looking for ways to make interest payments on its Eurobonds in U.S. dollars and euros, after a scheme to substitute them for rubles failed.
On May 25, U.S. Treasury Department refused to renew a key license, which would have allowed Moscow to make these transfers.