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Geopolitics, Sanctions, and Russian Sovereign Debt Since the Annexation of Crimea
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Executive Summary
This report illustrates how the Russian Federation’s sovereign debt, particularly foreign currency bonds, have become an arena for interstate competition in the aftermath of Russia’s 2014 annexation of Crimea. Sanctions, both real and threatened, on Russia’s government, state-owned enterprises, and other major enterprises have induced Russia’s government to adjust borrowing practices, currency management, and reserves allocation. Russia’s Eurobonds, the primary instrument through which the Russian state borrows in foreign currency, have been altered to allow repayment in various currencies, including—in some cases—the ruble. The potential impact of proposed bans on Russian sovereign debt issuance are analyzed because these developments show that foreign investors face novel risks in investing in Russian debt and that further Russian debt sanctions may have major geopolitical repercussions.
