Western Nations Force Russia To Default On Foreign Debt; Ruble Maintains 7-Year High

As of late Sunday, Russia has defaulted on foreign debt, which has not occurred since 1918 during the Bolshevik Revolution.

What Happened: The Kremlin failed to make payments totaling $100 million in dollars and euros owed to bondholders, missing a 30-day grace period, according to a Monday Wall Street Journal report.

NBC reported Monday that Russia owes nearly $40 billion in foreign bonds and has enough capital from oil and gas reserves to cover its foreign debts.

The Journal reports that Western governments have enforced stringent sanctions prohibiting the Kremlin's use of cross-border payment networks and accessing foreign bank accounts .

What to Expect: As reported by the Journal on Monday, bondholders can claim default and pursue litigation, although issues regarding sanctions have lawyers unclear if it is a formal default, adding that Russia has accused Western nations of creating an "artificial default", due to sanctions.

The primary issue is that the European Union has sanctioned payments passing through Russia's National Settlement Depository, while the U.S. has barred American banks from processing Russian debt payments since late May.

Related Link: The World's Financial War Against Russia: What Investors Need To Know

The Russian Economy: The Russian Ruble reached 53.1 to the dollar on Monday, maintaining its strongest levels in the last seven years.

Russia is the world's largest exporter of gas and the second largest exporter of oil, raking in nearly $60 billion from the European Union within the first 100 days of the Russia-Ukraine War, according to a June 23 CNBC report.

India's finance minister Nirmala Sitharaman has defended Russian oil in an interview with the Wall Street Journal, saying that, "My national interest tells me I should buy it where it is cheaper."

With limited sanctions regarding Russia's largest revenue generator, Russia should be able to cover interest payments and mitigate the sanctions impact on its economy.