Macroeconomically, we're worried about Russia because they may not be able to pay their bills. But they do have the money when things get straightened out.
But Russia's actions put pressure on other countries, and those countries may not have a big money cushion.
When financial problems hop from one region to another it's called contagion.
This week it appears as though the first sovereign default in several years may be Sri Lanka. Tuesday, they announced they were going to stop making payments on debts, in hopes something will come through for them during their 30 day grace period.
That something might be an IMF loan. The problem is the IMF usually wants debtors to be making payments before giving them new loans.
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Sri Lanka banned the use of fertilizer last year. Farm yields are down and prices are up.
On the surface, they said this was so the country could go organic (see here and here).
Unwritten in that is that most fertilizer is imported into Sri Lanka. And fertilizer production is heavily dependent on crude oil prices. Might not have been able to afford that because COVID-19 killed their tourism industry.
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