EXPLAINER: What's the impact of a Russian debt default?

Russia is poised to default on its foreign debt for the first time since the 1917 Bolshevik Revolution, further alienating the country from the global financial system following sanctions imposed over its war in Ukraine.

A 30-day grace period on interest payments originally due May 27 expired Sunday. But it could take time to confirm a Russian default.

“While there is a possibility that some magic could occur" and Russia gets the money through financial institutions to bondholders despite sanctions, “nobody’s making that bet," said Jay S. Auslander, a top sovereign debt lawyer at the firm of Wilk Auslander in New York. “The overwhelming probability is they won’t be able to because no bank is going to move the money.”

Last month, the U.S. Treasury Department ended Russia's ability to pay its billions in debt back to international investors through American banks. In response, the Russian Finance Ministry said it would pay dollar-denominated debts in rubles and offer “the opportunity for subsequent conversion into the original currency.”

Russia calls any default artificial because it has the money to pay its debts but sanctions have frozen its foreign currency reserves held abroad.

“There is money and there is also the readiness to pay," Russian Finance Minister Anton Siluanov said last month. “This situation, artificially created by an unfriendly country, will not have any effect on Russians’ quality of life.”

Tim Ash, senior emerging market sovereign analyst at BlueBay Asset Management, tweeted that the default “is clearly not" beyond Russia's control and that sanctions are preventing it from paying its debts because it invaded Ukraine.

Here are key things to know about a Russian default:

HOW MUCH DOES RUSSIA OWE?

About $40 billion in foreign bonds, about half of...