Why Russia Does Not Want to Default — Even in a Time of War

Behind the fight over whether Russia should be allowed to pay off its debts is an age-old issue: Borrowers, even in times of war, want to keep their reputations for making investors whole.

The US Treasury Department this week blocked Russia from paying off a bond it had due on Monday by denying a sanctions waiver to JPMorgan Chase & Co. to process the transfer. The Treasury said US banks would no longer be allowed to facilitate payments, but implied Russia could find other means, possibly using non-US banks.

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