Russia has threatened to pay international bondholders in roubles rather than dollars just days before a key interest payment on its external debt.
Anton Siluanov, Russia’s finance minister, said on Monday that a a temporary procedure for repaying foreign currency debt has been approved. However, Siluanov warned that payments would be made in roubles if sanctions prevent Russian banks from honouring debts in the currency of issue.
"Claims that Russia cannot fulfill its sovereign debt obligations are untrue,” “We have the necessary funds to service our obligations." Siluanov said in a statement.
According to JPMorgan, Moscow is scheduled to make a combined $117 million in interest payments this Wednesday on two dollar-denominated bonds. However, neither bond’s contracts gives Russia the option of paying in roubles, according to the Wall Street bank. Moscow will have a 30-day grace period to make the coupon payments.
According to Siluanov, the sanctions imposed by the US and its allies have frozen around $300bn of the $640bn that Russia had in its gold and forex reserves.
