Russia’s Finance Ministry said on Monday it had approved a temporary procedure to pay off debt in foreign currency, but warned that payments would be made in rubles if sanctions prevent banks from honoring debts in the currency in which they are paid. were issued.
Western sanctions over the events in Ukraine have blocked Russia from key parts of global financial markets, triggering its worst economic crisis since the fall of the Soviet Union in 1991.
“Assertions that Russia cannot meet its sovereign debt obligations are not true,” Finance Minister Anton Siluanov said in a statement. “We have the necessary funds to fulfill our obligations.”
The government is due to pay $117 million on two of its dollar-denominated bonds next Wednesday.
The ministry said it had approved a temporary procedure to allow banks to make payments in foreign currency, but said whether those payments could go ahead depended on sanctions.
Several Russian banks have been banned from the SWIFT international payments network, hampering efforts to get money out of Russia.
If they are not possible, the ministry said it would make the eurobonus payments in rubles, which amounts to a default. In recent weeks the ruble has plummeted to record lows.
Source: CNN Brasil
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