Even after the US and its allies imposed sanctions on Russia, the administration of President Vladimir Putin has been able to service the country's debts.
Russia's debt payments have been closely watched by investors because of the risk of a default that could affect the country's financial system and beyond. Russia averted a default on Thursday when it sent $447 million in bond payments, according to sources.
There have been questions about the ability and willingness to pay on the part of the Russian government, but this is happening within the context of sanctions.
This current situation is very different from a run-of-the-mill, emerging market debt crisis.
Russia's foreign currency debt payments are being hampered by the sanctions. The West has been accused of trying to engineer an artificial default with the sanctions.
The Kremlin spokesman said that Russia has all the funds and the ability to prevent a default.
Russia has been able to meet all of its debt obligations so far, and it could be because a default event would matter more to the country than it would the rest of the world.
Insider's Harry Robertson reported in March that the impact on the world's financial systems would be limited.
The country has low foreign debts. Russia had $39 billion in foreign currency bonds at the end of the year. In 2012 Greece had a default on 208.6 billion euros in debt.
It would be difficult for the government to arrange financing from other sources if Russia were to default.
He said that part of the strategy could be to contribute to the financial dislocations that Russia is now suffering from as a result of the moves on Ukraine.
The US Office of Foreign Assets Control issued a temporary license on March 2 allowing US persons to receive dividends and bond payments on Russian securities.
Russia will still have $2 billion worth of external bond payments to make before the end of the year, despite the license being set to expire on May 25.
The country's credit rating has been hit by widespread condemnation of Russia's war in Ukraine.
Russia's credit rating has been slashed by the Big Three credit rating agencies. According to a research firm, there is a 50% chance that Russia will default on its debt in the next year.
Warut Promboon is the head of credit research at Bondcritic, an independent research firm based in Hong Kong. Warut told Insider that companies like gas giant Gazprom and VTB bank gave high yields.
Warut, who has rated several Russian bonds in the past, said that they have the ability to pay. He said he isn't buying Russian bonds right now because of the risk from the Putin's unpredictable nature and the sheer amount of power he holds.
Warut said that Putin can do a lot of things, including directing authorities or companies not to pay their debts if sanctions get too intense, or directing payments to be issued in rubles instead of dollars.
He told Insider that there was nothing bondholders could do if the head of a country was against them.
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