Last week and in what Standard & Poors described as a ‘selective default’ Russia attempted to pay in rubles two dollar-denominated bonds worth USD650m. According to S&P, a selective default is declared when an entity has defaulted on a specific obligation but not its entire debt. In this case Russia defaulted on its foreign debt obligations because it offered bondholders payments in rubles, not dollars.

Moscow has a grace period of 30 days from April 4 to make the payments of capital and interest, but S&P said it does not expect it will convert them into dollars given Western sanctions that undermine its willingness and technical abilities to honor the terms and conditions of its obligations.

A full foreign currency default would be Russia’s first in more than a century, when Bolshevik leader Vladimir Lenin repudiated bonds issued by the Tsarist government.

And in Sri Lanka the Finance Ministry said in a statement the country was defaulting on all external obligations including loans to foreign governments. Sri Lanka’s foreign debt is put at USD51b with China its largest bilateral lender followed by Japan and India

Of the two countries Sri Lanka’s default is by far the most serious although the reputational damage resulting from the Russian default should not be underestimated. Its economy is projected to contract 8.4% in 2022 reflecting sanctions and the cost of Putin’s war and remembering always that Russia is no economic power-house. Its GDP is only slightly more than that of Australia while its GDP per capita at $10,115 is five times smaller than that across the ditch at $52,905 (2020 figures).

And finally the loss of the Moskva, flagship of Russia’s Black Sea fleet, damaged in an explosion on Wednesday and now sunk with the Ukrainians claiming they took it out with a Neptune missile, a claim disputed by the Russians. Whatever the cause this will be a propaganda victory for the Ukrainians and more evidence of the lie by Putin that ‘his’ Special Military Operation is going to plan … some plan when you lose your flagship.