Russia Says it Pays $649.2 Million Bond Payment in Rubles

Russia on Wednesday disclosed it has paid $649.2 million for bonds maturing this month and in April 2042 in Rubles after foreign banks rejected dollar payments sent earlier, Russia’s Finance Ministry disclosed, according to a Bloomberg report.

The ministry said it sent dollar payments earlier but they were rejected, leaving the country with no option than to use domestic financial institutions. The ministry added that it transferred the full payment in rubles to the National Settlement Depository.

The Finance Ministry said it “considers it fulfilled its obligations in full.”

On Monday, the United States halted the Russian government from paying its $600 million maturing bond from its foreign reserves held in U.S banks.

The decision was meant to pressure Moscow and subsequently hurt the Eastern nation’s economy for invading Ukraine on February 24, 2022.

“What they’re basically tying to do is force their hand and put even more pressure on (to deplete) foreign-currency reserves back home,” said David Wolber, a sanctions lawyer at Gibson Dunn in Hong Kong.

“If they have to do that, obviously that takes away from Russia’s ability to use those dollars for other activities, in essence to fund the war.”