A Russian default on its sovereign debt would not have a large impact on the global economy, said Gita Gopinath, the No. 2 official at the International Monetary Fund, on Tuesday.
“If there were a default, I think the direct effect on the rest of the world would be quite limited,” Gopinath said, in a virtual discussion hosted by Foreign Policy magazine.
“The numbers that we’re looking at are relatively small from a global perspective. It is not a systemic risk to the global economy,” she added.
Some individual banks will have greater exposure to Russia debt, she noted.
From Russia’s perspective, a default would have consequences for the long term, Gopinath said.
“When you’ve defaulted, reentry into the market is not easy. And that can take a long time,” she said.
Earlier this month, Russia made payments to avoid default.
Sanctions put on Russia after the country invaded Ukraine don’t prohibit debt payments.