Kremlin denies report of Russian debt default

A Russian one rouble coin is pictured in front of a monitor showing the Kremlin's tower.

After a grace period on $100 million interest payments ran out, the Kremlin rejected claims that it had defaulted on its external debt for the first time in more than a century.

In a call with reporters, Russian spokesman Dmitry Peskov said Russia made bond payments due in May but that they had been blocked by Euroclear because of Western sanctions on Russia. Russia has struggled to keep up with payments on $40 billion of outstanding bonds since its invasion of Ukraine on February 24, as sweeping sanctions have made its assets untouchable to many investors.

Russia has long said it has the money to pay, and that's why sanctions block foreign bondholders from receiving the cash. On Monday, a U.S. official said the default showed how dramatically the sanctions were impacting Russia's economy.

Around half of Russian gold and foreign exchange reserves - some $300 billion - were blocked earlier in the day by western sanctions imposed after Moscow sent troops to Ukraine.

Our position is well known. Peskov said that our reserves are unlocked unlawful and all attempts to use them will be unlawful and would amount to outright theft.

The British government said on Sunday that Britain, the United States, Japan and Canada will ban all new imports of Russian gold in an effort to widen sanctions on Moscow.

When asked if Russia would be able to re-direct its gold to Asia, Peskov said that the global precious metals market is quite large. If one market loses its appeal, there is a redirection to where conditions are more comfortable, according to Peskov.

Russia invaded Ukraine on February 24 in what the Kremlin calls a special military operation to rid the country of far-right nationalists and ensure Russian security.

Kyiv and the West dismiss it as a baseless pretext for a war of aggression that has killed thousands.