Russia is on the verge of defaulting on its debt obligations, a major credit agency has cautioned.
The country broke the terms of two bond contracts with payments scheduled on 4 April by paying in rubles, instead of dollars.
US financial services firm Moody’s has noted the use of rubles “represents a change in payment terms relative to the original bond contracts and therefore may be considered a default under Moody’s definition if not cured by 4 May, which is the end of the grace period.”
Moody’s said the bond contracts have no provision for repayment in any other currency other than dollars.
Defaulting would enable creditors to claim insurance payouts and be the first lapse of its kind on foreign obligations for Russia since the Bolshevik revolution of 1917.
Russia has previously accused the west on already defaulting on its obligations by freezing its reserves and called for a fresh system to replace the Bretton Woods financial structure created in 1944.