After missing a crucial deadline, it’s thought that Russia has defaulted on its debt for the first time since 1998.

Russia has the resources to fulfill a $100 million payment that was due on Sunday, but sanctions prevented Russia from delivering the money to its foreign creditors.

The default would have been a serious damage to the country’s reputation, and the nation had been desperate to prevent it.

Statements of a default, according to Kremlin spokesperson Dmitry Peskov, “were completely unwarranted.”

He also stated that the reserves had been “illegally” stopped and that an intermediate bank had withheld the funds.

Russia has stopped making payments on its foreign bonds, according to the White House, which blamed sanctions for effectively shutting off Russia from the world financial system.

The scenario, which the Russian finance minister referred to as “a farce,” is not anticipated to have an immediate impact.

According to Chris Weafer, CEO of Moscow-based firm Macro Advisory, Russia doesn’t need to seek money abroad since it is profiting from expensive commodities like oil.

But if the situation with Ukraine and the international sanctions improves, he claimed it will lead to a “legacy” problem.

When we reach that point, “this is the kind of activity that will hang over the economy and make recovery much more difficult,” he warned.

On May 27, the $100 million interest payment was due. According to Russia, the funds were transferred to a bank called Euroclear, which would subsequently distribute the funds to investors.

However, according to Bloomberg News, that payment has been held there and has not yet reached the creditors.

In the meanwhile, the Reuters news agency, which quoted two sources, said that certain Taiwanese holders of Russian bonds using euros as the unit of currency have not received interest payments.

It is deemed a default since the money was not received within 30 days of the due date, which was Sunday night.

While refusing to confirm if the payment had been stopped, Euroclear insisted that it complied with all restrictions put in place as a result of Russia’s invasion of Ukraine.

Russia denied having missed a payment on the obligation. According to Dmitry Peskov, a spokesperson for the Kremlin, Moscow had already paid the payments that were due in May, and Euroclear’s decision to withhold them because of the sanctions was “not our concern.”

According to the RIA Novosti news wire, Russian Finance Minister Anton Siluanov acknowledged that overseas investors would “not be able to receive” the payouts.

He disputed that this amounted to a true default, which often occurs when governments refuse to pay or their economies are so fragile that they are unable to find the money. Russia wants to pay and has enough of money to do so.

“The general consensus is that this is not at all a default. This entire scenario appears to be a sham.”

Normally, countries that have defaulted cannot borrow any additional money, but sanctions have effectively prevented Russia from borrowing in Western markets.

Additionally, it’s estimated that Russia makes $1 billion a day from the export of fossil fuels, and its finance minister, Anton Siluanov, stated in April that the nation had no intentions to take on additional debt.