Will US inflation get worse if Russia defaults on its debt?

While Russia’s attack on Ukraine has many serious humanitarian consequences, there are also financial ones.

Russia has collectively borrowed approximately $480 billion; some of that is sovereign debt – what the Russian government has borrowed either from Russian investors in rubles or from other investors from around the world, in other currencies including the dollar, the euro, the yuan, etc. Some of that debt is corporate debt – what Russian companies have borrowed to raise money.

When Western investors think of a potential Russian debt default, they are focused on a very small percentage: about $20 billion.

Distressed debt investors such as Hans Humes, CEO of Greylock Capital, emphasize that the amount is small and that an initial default is already widely expected. If Russia were to default on some or all of its debt, there would probably be greater global market volatility on the news, but longer term, the greatest risks to the global economy…

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