Russia has paid foreign holders of Eurobonds in rubles for the first time after an attempt to settle the $649.2 million payment was rejected by a foreign financial institution under orders from Washington, the Russian Ministry of Finance announced on Wednesday.
Earlier this week, the US Treasury stopped Russia from paying holders of its sovereign debt more than $600 million from reserves held in US bank accounts, saying that the Kremlin had to choose between draining its dollar reserves and default.
Roughly half of Russia’s foreign exchange reserves, worth over $300 billion, have been frozen by Western countries as part of sanctions over Ukraine.
“Russia has all necessary resources to service its debts… If this blockade continues and payments aimed for servicing debts are blocked, it (future payment) could be made in rubles,” said Kremlin spokesman Dmitry Peskov.