Capital Economics estimates Russia’s foreign debt at half a trillion dollars, despite the fact that its foreign debt has been declining for years, since 2014 when Western sanctions were imposed on Crimea and has now shrunk by a third.
Of that, $ 67 billion is government debt, $ 30 billion is central bank debt, but the largest amount, by and large, is the business’s foreign debt, amounting to $ 310 billion. dollars.
“The losses from a Russian default on foreign debt would affect foreign investors, not just Russians,” warns Capital Economics. However, he stressed that the consequences for the Russian economy would be serious, as such a bankruptcy would trigger more liquidations in Russian assets, an even bigger fall for the ruble and tighter financial conditions.
Russia has already suspended coupon payments on Russian government bonds to foreign investors. At the same time, Capital Economics points out that the risk of governments and businesses being unable or unwilling to pay their external debts (other than those already affected) has increased significantly.
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