A Russian debt default looks almost inevitable

A month ago, as Russia faced unprecedented economic sanctions in response to its invasion of Ukraine, a sovereign default seemed likely. America and its Western allies had frozen roughly half of the country’s $630bn foreign-exchange reserves. Firms such as JPMorgan Chase and MSCI had removed Russian debt from widely tracked bond indices. Investors had begun writing down the value of their assets, which were trading at distressed levels. And the spreads on credit-default swaps (CDSs)—insurance-like derivatives that pay out in the event of a default—had reached record highs. “We no longer think of Russian default as improbable,” Kristalina Georgieva, the head of the IMF, said on March 13th.