The payment in rubles, corresponding to the exchange rate of USD 235 million (EUR 233 million), covers the interest on two bond issues redeemable in 2027 and 2047, respectively.
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This amount has been credited to the account of the Russian National Depository for Settlements (NRD) and the Russian Ministry of Finance claims that Moscow has thus fulfilled its obligations.
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However, the NRD is currently applying European Union (EU) sanctions against Russia in response to its repeated invasion of Ukraine. Thus, this money cannot be transferred to Western depositories or bondholders.
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To address this, Russia has introduced a procedure that requires creditors to prove to the NRD that they own the bonds and can then pay them interest.
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However, it is not clear whether this procedure will work, given the level of sanctions imposed by the West.
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It is also unclear at what point Russia may be declared insolvent, which could potentially lead to bankruptcy.
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Although Russia is willing and able to pay interest in accordance with its commitments, sanctions may make payments impossible.
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The fact that payments are made in rubles is also controversial, as payments for bonds issued abroad are usually made in dollars or euros.
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The coming weekend is crucial, as Russia has to pay for a number of other bonds, and failure to do so could lead to insolvency.
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It is not clear what will happen if Russia does not pay or pays in rubles. Experts believe that payments in rubles are not legitimate, unless provided for in the terms of the bond.
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