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Morgan Stanley predicts Russia Venezuela-style default in April, - Bloomberg

In the coming months, Russia risks losing its solvency.

Morgan Stanley predicts Russia Venezuela-style default in April, - Bloomberg

According to analysts at the American financial corporation Morgan Stanley, the Russian Federation risks losing its solvency in the coming months.

This is stated in the Bloomberg material.

According to analysts, the default in Russia may occur on April 15.

"We consider default to be the most likely scenario," wrote Simon Weaver, one of Morgan Stanley's executives, an Emerging Market Loan specialist.

He compared Russia's prospects with Venezuela, experiencing the worst economic crisis related to humanitarian disaster during the last several years. 

The publication notes an ending of a 30-day grace period on coupon payments in mid-April, which the Russian government owes on dollar bonds with repayment due in 2023 and 2043. Investors now value the 2023 bonds at around 29 cents on the U.S. dollar.

Analysts say the default could be caused by Russia's unwillingness to pay foreign creditors under sanctions imposed by the United States and other Western countries.

It was reported that Venezuela put into circulation a banknote of 1 million bolivars last year. The country has been in a severe socio-economic crisis for several years. According to the results of 2018, inflation amounted to 1.7 million percent, and in 2019 – more than 9,585 percent. The Venezuelan government introduced a new currency – the sovereign bolivar to strengthen the economy. But its exchange rate fell sharply. Currently, 1 U.S. dollar costs more than 1.8 million bolivars (as of 2021 – Ed.).

In February 2020, Bloomberg announced that the Russian company Goznak would print new banknotes for Venezuela.

It was reported earlier, on March 3, that sanctions for a military invasion of Ukraine can lead Russia to default, that was also warned by analysts of JPMorgan.

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