Payment for Russian government dollar bonds with coupons due Wednesday had not been accounted for at the close of business in London, according to two sources familiar with the situation.
This could lead the sanctions-ridden country to default for the first time since 1998.
Moscow was required to pay $117 million (£89.4 million) in interest payments, or coupons, to investors who held two dollar-denominated bonds. But with much of its foreign exchange reserves frozen by international sanctions, it may not be able to pay.
There is a 30-day grace period, but this could pave the way for a historic default that would increase intense pressure on the Russian economy.
However, on the other hand, as sanctions roll in, there could be a compromise between Ukraine and Russia and so the markets are in risk appetite mode. The MSCI World Equity Index rose 0.87%, pulling away from the one-year lows hit in the previous session. On Wall Street, the S&P 500 is up 1%, the Nasdaq Composite is up 1.5% and the DJI is up 0.7%.
Russian Foreign Minister Sergei Lavrov also said that some formulations of agreements with Ukraine were close to being agreed upon. Moscow said the sides were discussing a status for Ukraine similar to that of Austria or Sweden, meaning being members of the European Union but remaining neutral and outside the NATO military alliance.
Source: Fx Street
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