The rating agency Moodyʼs has announced Russiaʼs default on foreign borrowing.
This was reported by Reuters.
"For the first time in more than a century, Russia has defaulted on its international bonds, as broad sanctions have effectively cut the country off from the global financial system," the agency wrote.
It explained that Russiaʼs efforts to avoid the first major default on international bonds since 1918 were opposed by the United States in late May, when the US Treasury Departmentʼs Office of Foreign Assets Control (OFAC) effectively blocked Moscow from paying off its debts.
The default is largely symbolic, given that Russia is currently unable to borrow abroad and does not need it due to its rich revenues from oil and gas exports. But the current status will reduce the possibility of loans in the future.
Rating agencies usually formally downgrade a countryʼs credit rating to reflect default, but this does not apply to Russia, as most agencies no longer rate the country in connection with the invasion of Ukraine.