Russia's Finance Ministry said Monday it has approved a temporary plan to service its external debt obligations, but warned that biting international sanctions mean the payments could be made in roubles.
The ministry said that banks can repay foreign currency debts in roubles, the value of which has collapsed since the West imposed harsh sanctions on Russian financial institutions and froze foreign currency reserves in response to the invasion of Ukraine.
The payments will be made at the exchange rate of the Russian Central Bank.
The announcement comes after President Vladimir Putin said earlier this month that "unfriendly" states could see financial obligations settled using only the volatile currency.
Finance Minister Anton Siluanov said the temporary measure was necessary as Russia is unable to use financial reserves worth around $300 billion because of the Ukraine war sanctions.
'Artificial default'
This is just under half of the country's reserves of around $640 billion, he said.
Siluanov said on Monday that the freezing of currency accounts held by the Bank of Russia could been interpreted at as an attempt by foreign powers to to trigger an "artificial default," according to the TASS news agency.
But he said that "statements that Russia cannot repay its state debt obligations are false. The required funds to service our liabilities are in place."
