Russia was being convulsed by communist revolution the last time it failed to pay its foreign-currency
debts, in 1918.
But President Vladimir Putin's brutal invasion of Ukraine and the tough Western sanctions
have put the economy in crisis and left the government teetering on the brink of another
default.
Such an event would ripple through global financial markets and further alienate Russia
from the world economic system.
It's also raised memories of Russia's last debt crisis in 1998, which shook Wall Street.
Let's take a step further - for that I have Daniel Yoo, Global strategist at Yuanta Securities
joining me live via Skype.
Let's start from the basics.
How did Russia come to where it is?
Why is Russia facing default?
Russia faces its first big test today - Wednesday, that is - when 117 million dollars worth of
interest payments on two dollar bonds come due.
Russia has a 30-day grace period, making 15 April the key date to watch.
When might
Russia default?
The fallout from Russia's debt crisis is likely to be less dramatic than many might have expected.
Russia's foreign debts are actually pretty small compared to many other countries.
Yet a multibillion-dollar default will still be felt in financial centers around the world,
especially if Russian companies are sucked in.
Why is that the case?
Who will be hurt
the most?
Russia last defaulted in 1998, although not on its foreign-currency debt.
The event sent shockwaves through the U.S. financial system.
One hedge fund, called Long Term Capital Management, had to be bailed out to the tune of 3-point-6
billion dollars.
Should Russia default this time, will it cause an economic or financial crisis?
How will
it impact the South
Korean economy?
Daniel Yoo, Global strategist at Yuanta Securities, thanks for sharing your thoughts with us.
We appreciate it.