Russia is threatening to pay off its foreign debts with its devalued ruble, after major Russian banks have been sanctioned, cutting them off from global financial markets due to Moscow's invasion of Ukraine.
Russia is expected to pay $117 million on two Eurobonds on Wednesday, according to Reuters.
In a Monday interview with state television, Russian Finance Minister Anton Siluanov said Moscow had asked Western banks to carry out the transaction. The sanctions have isolated Russian banks and frozen billions of dollars in gold and reserves, according to the news outlet.
Russian banks have been banned from the SWIFT international payment network, which has hampered efforts to move money outside the country.
If we see complications with executing the order then we will prepare a relevant transfer order in the rouble equivalent, Siluanov said. He said that the freezing of the central bank and government's foreign currency accounts was a desire by several Western countries to organize an artificial default. Since Russia's invasion of Ukraine, the ruble has plummeted to record lows and the sanctions have caused an economic crisis not seen in the country since the fall of the Soviet Union in 1991.
On Monday, State Department spokesman Ned Price said there would be consequences for any country that supports Russia's military aspirations in Ukraine.
Ned Price told reporters that they would not allow any country to compensate Russia for its losses. We've made very clear that any country that wants to try to bail Russia out of this economic, financial morass will have consequences. We will make sure that no country will be able to get away with such a thing.