June 28, 2022: -On Sunday, Russia joined its starting major foreign debt default for over a century after a grace time on two international bond payments lapsed.

On Sunday, Interest payments counting $100 million were dedicated on May 27 and were subject to a grace period that expired. A few media outlets have reported that bondholders who have not received the payments after trying to pay in its ruble currency were blocked by international sanctions.

The Kremlin has denied the claim that Russia is in default, with spokesperson Dmitry Peskov telling a press call that Russia made the bond payments due in May. Still, Euroclear has stopped them due to Western sanctions, rendering the non-delivery of payments “no problem.”

Sweeping sanctions imposed by Western powers in response to Russia’s unprovoked invasion of Ukraine and countermeasures from Moscow have effectively ostracized the country from the world’s financial system. Still, the Kremlin is driving to find ways to get payments to bondholders on multiple occasions.

Attempts to circumvent sanctions are taking a further blow in late May, however, when the U.S. Treasury Department permitted a pivotal exemption to expire. The waiver had earlier permitted Russia’s central bank to process payments to bondholders in dollars through the U.S. and international banks.

Russian Finance Minister Anton Siluanov indicated that Russia might have found one more means of payment this month. Moscow wired the $100 million in rubles to its domestic settlement house. Still, the two bonds in question are not subject to a ruble clause that would allow payment in the domestic currency to convert overseas.

On Monday, Reuters said early, Indian two sources that some Taiwanese holders of Russian Eurobonds have not received the interest payments due on May 27, indicating that Russia may be entering its first foreign debt default from 1918, despite having much cash and willingness to pay.

Reportedly, Siluanov told Russian state-owned news agency RIA Novosti that the blockage of payments does not form a simple default, which usually arrives from reluctance or inability to pay, and reached the situation as a “farce.”