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Sanctions could lead to Russia's default

The occupying country will not have enough money to pay its debts

Sanctions could lead to Russia's default

Russia may find itself in a situation where there is insufficient money to pay off foreign debts. Analysts at JPMorgan warned about this, writes Reuters.

Russia has to pay about $ 700 million of foreign debt in March.

Currently, the gold and foreign exchange reserves allow Moscow to do so. But sanctions and countermeasures within Russia regarding restriction of foreign payments could lead to a shortage of capital to pay off debt.

It should be recalled that on Wednesday, 2 March 2022, the United States decided to introduce blocking sanctions to 22 Russian companies related to the defense sector.

Earlier, just in one day, the Russian economy was overtaken by another batch of sanctions due to the war with Ukraine.

In particular:

  • the US government has banned Russian aircraft from flying in US airspace following similar steps by the EU and Canada;
  • Apple has suspended exports to Russia and restricted other services;
  • Canada has banned transactions with the Central Bank of Russia;
  • Instagram has blocked all RT and Sputnik accounts in 27 European countries;
  • Japanese Honda and Mazda have announced the cessation of exports of cars, motorcycles, and their components to Russia;
  • the American carmaker Ford Motor (SPB: F) Company has announced the end of operations in Russia, including the joint venture with the group "Sollers (MOEX: SVAV) Auto" from the production of LCV Ford Transit in Tatarstan;
  • Boeing and Airbus have suspended support of Russian airlines and stopped delivering spare parts;
  • the Maersk shipping group has suspended all shipments to and from Russia;
  • The Cannes Film Festival refused to host Russia's official delegation this year;
  • the stock exchange organization Deutsche Börse stopped trading in all Russian securities on 2 March 2022;
  • The International Skating Union (ISU) has excluded Russian and Belarusian athletes from international competitions in figure skating, short track, and skating.
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