Russia’s looming sovereign default: economic reality or fairy tale for mainstream media?

The economic rationale for Russia’s sovereign default is too weak today, political logic dominates in this case.

Russia’s oil and gas export revenues fully cover principal and interest payments on its sovereign debt.

The West didn’t nudge Russia to default on its financial commitments. The sovereign debt payment on 4 April 2022 is a striking example to illustrate (72,5 % of this tranche was made in Russia’s national currency).

Russia’s financial weapon via specific “ruble internationalization” goes far beyond the proper meeting of sovereign debt obligations: EU countries seeking the way to withstand Russia’s efforts to use its ruble for payments on fossil fuels contracts.

At the beginning of May 2022 Russia’s bargaining power in the economic realm will pass through its stress-test.

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