Russia has paid $649m worth of interest payments using its US currency reserves, in a bid to avoid a default.
The payments come after Russia said it would only repay its debts in its own currency, as it claimed sanctions were blocking it from paying in dollars.
The Russian Federation has now sent $649m in US dollars to Citigroup’s London office, which is responsible for distributing cash to bondholders.
The payments come as analysts raised concerns that Russia may default on its debt for the first time since 1998, after the country lost access to currency reserves in foreign banks due to sanctions.
Credit agencies rejected Russia’s plans to pay its debts in roubles, as they said bond repayments must be made in the currency originally specified.
The Kremlin later threatened legal action Western governments, as it claimed Western countries had pursued a “deliberate policy” aimed at forcing it to default on its sovereign debt.
Any default would have significant implications on Russia’s ability to borrow money in the future.
Although the bonds were initially meant to be paid at the start of April, Russia was granted a 30-day expansion until 4th May.