Russia's finance ministry said on Monday it had approved an interim procedure for paying debts in foreign currency, but warned that payments would be made in rubles if Western sanctions prevented them from paying them in foreign currency.
Western sanctions over Russia's invasion of Ukraine have cut Russia off from key parts of global financial markets, triggering its worst economic crisis since the fall of the Soviet Union in 1991.
"The claim that Russia is unable to meet its sovereign debt obligations is untrue. We have the necessary bonds to meet our obligations," Finance Minister Anton Siluanov said in a statement.
The government will pay $117 million in two dollar-denominated bonds on Wednesday.
Russia's Finance Ministry said it had approved temporary procedures to allow banks to make payments in foreign currency, but said the possibility of such payments would depend on sanctions.
Several Russian banks have been banned from the SWIFT international payments network, hampering efforts to move money outside Russia.
If payment is not possible, the finance ministry said it would make Eurobond payments in rubles, which are the same as defaults. The ruble has slumped to a record low in recent weeks.
"Freezing of government central bank accounts and foreign currency can be seen as a desire on the part of some Western countries to set up artificial defaults," Siluanov said.
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