Russian default fears send bond yields to record high despite recent payment as trading resumes

• Russia's 10-year OFZ ruble bond yield skyrocketed to 19.7% in early Monday trading, before easing later.
• The Moscow Exchange reopened for bond trading Monday after a three-week halt, though stock trading remains on hold.

The yield on Russia's 10-year benchmark bond soared to a new all-time early Monday amid fears of a default as Western sanctions cripple the economy.

The OFZ ruble treasury yield skyrocketed to 19.7% before steadying at around 14% later as bond trading on the Moscow Exchange resumed. Russia halted trading three weeks ago after its invasion of Ukraine, though stock trading remains on hold indefinitely.

Western sanctions continue to put severe pressure on Russia's economy, and its central bank is responding accordingly.

The bank said Friday that it would start buying up OFZ bonds when trading reopens Monday to ease volatility. Earlier, the bank doubled its interest rates, and said it was seeing a liquidity shortage as citizens made a run on banks.

Still, Russia is teetering on default, even after staving it off for now by sending dollar payments to creditors last week. Uncertainty among investors is rising ahead of Russia's next $615 million payment coming in April, and a major $2 billion payment after that, according to JPMorgan.

"Sanctions have severely undermined the Russian central bank's tools to prevent economic collapse," John Breen, lead global risk analyst at intelligence firm Sibylline, told Insider previously. "The domestic economic situation [in Russia] is likely to deteriorate further."