Sanctions-hit Russia calls reports of loan default a 'farce'

On Monday, sanctions-hit Russia acknowledged that two of its debt payments had not reached the creditors. Nonetheless, the nation denied that this amounted to default on a loan. In a statement, the Russian finance ministry claimed that international settlement and clearing systems had "received funds in full in advance," but that "the actions of third parties" prevented the payments from reaching the intended beneficiaries.Following reports of the alleged default, the Kremlin too insisted that there were "no grounds" to say that Moscow had defaulted on its foreign-currency sovereign debt. This comes as the West hammers Russia with sanctions over its operation in Ukraine.

Talking to reporters after a key payment deadline's expiry, Kremlin spokesperson Dmitry Peskov said that "there are no grounds to call this situation a default."

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He asserted that the loan was settled by Russia in May, calling the "claims of default" absolutely wrong.

For the first time in more than a century, according to a story by Bloomberg News published earlier on Monday, Russia 'defaulted' around $100 million in interest payments that were due on Sunday.

Russian officials claim that the West is attempting to push Moscow into a false default, and finance minister Anton Siluanov has even called the whole thing a "farce."

Moscow has been largely cut off from the global financial system as a result of punitive Western sanctions, making it challenging for Moscow to pay its debts.

The last time Russia missed a payment on a foreign currency loan was in 1918, when Vladimir Lenin, the leader of the Bolshevik revolution, refused to acknowledge the debts of the overthrown tsar's government.

(With inputs from agencies)

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