Liz Truss hails British might as Putin’s economy collapses – ‘Our sanctions are working’ | Politics | News

It will likely be a selective default, the agency said, as investors are unlikely to be able to convert rubles into “dollars equivalent to amounts originally owed.”

UK Foreign Secretary Liz Truss commented on the developments to her 216,000 Twitter followers: “Our unprecedented sanctions package is working.

According to S&P, a selective default occurs when a company or country has defaulted on a specific obligation but not all of its debt.

Russia now has a 30-day grace period that began April 4 to make the payments, but S&P says they are unlikely to be paid in dollars due to Western sanctions.

According to the agency, the sanctions undermine Russia’s “willingness and technical capabilities to honor the terms and conditions” of its obligations.

A total foreign exchange default would be Russia’s first in more than a century since shortly after the Bolshevik Revolution of 1917.

Russia is currently unable to access $315 billion of its foreign currency reserves due to Western sanctions following the invasion of Ukraine.

Until last week, the United States allowed Russia to use some of its frozen assets to pay back dollar investors.

READ MORE: EU plot to raid £560bn London market hit hammer

Kremlin spokesman Dmitry Peskov told a news conference last week that any default would be “artificial” because Russia has the dollars to pay investors but is not allowed access to them.

He said: “There is no reason for a genuine default. Not even close.

Moscow artificially supported the ruble after its value fell 40% following the invasion.

The measures include raising interest rates by 20% and insisting that exporters exchange most of their foreign currency earnings for roubles.

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