For the first time in over a century, Russia has officially defaulted on its foreign-currency sovereign debt. The country failed to meet a 30-day grace period deadline on two interest payments originally due on May 27th.

The obvious reasoning behind the default is the sanctions against Russia because of the country’s invasion of Ukraine launched in late February. Russian officials are arguing that the default is fake due in part to the fact that Russia can pay its debts but has frozen money in foreign currency reserves.

"There is money and there is also the readiness to pay. This situation, artificially created by an unfriendly country, will not have any effect on Russians’ quality of life."

Anton Siluanov, Russian Finance Minister, said.

The Russian Finance Ministry continued on saying that after the United States had ended its ability to pay back debt using American banks, it would offer "the opportunity for subsequent conversion into the original currency." The country currently owes nearly $40 Billion in foreign bonds.

Sitting in those frozen currency reserves is $640 Billion in foreign currencies and gold. Much has been and continues to be held overseas due to the account freezes. Economists and expert officials see the default as inevitable for Russia. Insurance contracts covering Russian debt have, for weeks, placed an 80% likelihood the country would default.