Russia made has made a last-minute u-turn and made a number of overdue international debt payments in US dollars, backtracking from a previous vow to only make payment in rubles.
Russia’s finance ministry said it had made a $564.8 million payment on a 2022 Eurobond along with $84.4 million on a 2042 bond, both in dollars as specified.
The payments were supposed to have been made earlier this month, with a 30-day grace period attached to the bonds meaning the final deadline for payment was on May 4th.
Russia had previously argued that western sanctions made it impossible to make payment.
The ministry today though said it had sent the funds to the London branch of Citibank, the agent responsible for disbursing the funds to Moscow’s creditors. It is unclear whether sanctions will prevent the US and other western countries from receiving the payments.
Earlier this month, Moody’s had said that Russia may already be in default due to its failure to make payments.
Russia has not suffered a default of any type since 1998 and has not defaulted on international debts since 1918 in the wake of the Bolshevik revolution.
The risk of default is now a serious consideration for the Kremlin though, as sanctions over Russia’s invasion of Ukraine impact on the country’s ability to function economically.