What it means for Russia to default on its debt

[IronLionZion]

https://www.cnn.com/2022/03/17/economy/russia-default-explained/index.html

First thing's first: What is 'default'?
Put simply: Governments, just like regular people, take out loans to finance big projects, and those loans must be repaid on a schedule. A default happens when a borrower cannot pay the interest or principal on its debt when it comes due.

Why can't Russia pay its bills?
To be sure, Russia has the money. It just can't access a bunch of it.
Since 2014, the last time the West sanctioned Russia over its annexation of Crimea, the Kremlin has built up about $640 billion in foreign reserves. About half of those funds are now frozen under Western sanctions imposed after the invasion of Ukraine.

What happens if Russia defaults?.
"A default is a disaster for Russia," said Timothy Ash, a senior sovereign strategist at BlueBay Asset Management.
The country's assault on Ukraine has left it with few friends in the international community, and a default would likely cut off access to foreign financing for years.

Russia's economy is already hemorrhaging. Since the war started, its currency has fallen to record lows, critical revenue is slowing as oil traders shun Russian crude, dozens of international corporations have suspended operations, and sanctions have frozen more than $300 billion in foreign currency reserves.

Lots more useful info explained at the link, like payments in dollars or Euros vs rubles. CNN is free. Clicking it won't send you to the gulag.

[PoliticAverse]

1. So which banks will we be bailing out this time? n/t

[IronLionZion]

2. Screw the banks

They probably won't get much this time. Russian debt shouldn't be much of any American bank's portfolio anyway.

Rubles aren't worth very much these days.

[Justice matters.]

3. They'll put that in their provisions for bad credits. nt