Is it likely that Russia could default in this week on its debt payments?

As sanctions tighten and the US puts a ban on dollar payments out of Russian dollar accounts in American banks, it may really start to pinch the Russian economy. While Russia did honour the previous debt it looks like Russia could possibly be on the brink of a major external default, although you can expect Russia to still have some cards up its sleeve as we saw in the previous gold peg that Putin announced to weaken the dollar.

Russian bonds are currently trading at almost distressed levels after the US Treasury halted dollar debt payments in US banks. Russia has offered creditors roubles instead. If the default happens, this will be the first default since 1917, when Russia had defaulted on debt. Even in 1998 it was only a domestic default and not an external debt. It remains to be seen if old friends of Russia like China and India can come to their rescue.