A Russian sovereign default on its debts is no longer "improbable", but unlikely to trigger a global financial crisis, the head of the International Monetary Fund (IMF) Kristalina Georgieva said on Sunday.
"In terms of servicing debt obligations, I can say that no longer we think of Russian default as improbable event, Russia has the money to service its debt, but cannot access it. What I’m more concerned about is that there are consequences that go beyond Ukraine and Russia." Georgieva said on CBS’s Face the Nation programme.
Georgieva said the sanctions imposed by the United States and its allies after the full-scale invasion of Ukraine were already having a "severe" impact on the Russian economy and would trigger a deep recession in Russia this year. Food and energy prices are expected to rise due to the war as well, leading to hunger in Africa, she added.
When asked whether a Russian default could trigger a global financial crisis, Georgieva answered: "For now, no." Banks’ global exposure to Russia is "definitely not systemically relevant," she added.
Last week, Georgieva said the IMF would downgrade its previous forecast for 4.4% global economic growth in 2022 because of the Russian-Ukrainian war.
