Published by Wanda Rich
Posted on March 14, 2022
2 min readLast updated: February 8, 2026
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(Reuters) -Russia’s finance ministry said on Monday it had approved a temporary procedure for repaying foreign currency debt, but warned that payments would be made in roubles if sanctions prevent banks from honouring debts in the currency of issue.
(Reuters) -Russia’s finance ministry said on Monday it had approved a temporary procedure for repaying foreign currency debt, but warned that payments would be made in roubles if sanctions prevent banks from honouring debts in the currency of issue.
Western sanctions over events in Ukraine have cut Russia off from key parts of global financial markets, triggering its worst economic crisis since the 1991 fall of the Soviet Union.
“Claims that Russia cannot fulfil its sovereign debt obligations are untrue,” Finance Minister Anton Siluanov said in a statement. “We have the necessary funds to service our obligations.”
The government is due to pay $117 million on two of its dollar-denominated bonds on Wednesday.
The ministry said it had approved a temporary procedure to allow banks to make payments in foreign currency, but said the possibility of those payments going through would depend on sanctions.
Several Russian banks have been banned from the SWIFT international payments network, hampering efforts to move money outside of Russia.
If payments are not possible, the finance ministry said it would make Eurobond repayments in roubles, which is tantamount to a default. The rouble has dived to record lows in recent weeks.
“The freezing of the central bank and government’s foreign currency accounts can be seen as a desire from several Western countries to organise an artificial default,” Siluanov said.
(Reporting by Reuters; Editing by Christopher Cushing and Kim Coghill)
Foreign currency debt refers to loans or bonds that are denominated in a currency other than the borrower's domestic currency. This type of debt can expose borrowers to exchange rate risks.
A financial crisis is a situation in which the value of financial institutions or assets drops significantly. It can lead to widespread economic instability and loss of confidence in the financial system.
Debt sustainability refers to a country's ability to maintain its current level of debt without requiring debt relief or accumulating further debt. It is crucial for long-term economic stability.
Payments in roubles refer to transactions conducted using the Russian currency, the rouble. This can occur when foreign currency payments are not possible due to sanctions or other restrictions.
An economic crisis is a severe disruption in the economy that can lead to a recession or depression. It often results from various factors, including financial instability, high unemployment, and reduced consumer confidence.
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