Under the plan, obligations will be considered fulfilled by payment in rubles
Russian President Vladimir Putin signed a decree establishing a temporary procedure for payments of external foreign currency public debt on Wednesday.
The bond-payment procedure mirrors the mechanism Moscow uses to process payments for its gas, in rubles.
The decree, in particular, establishes the specifics of working with foreign depositories, maintaining special accounts, indexing funds credited to them, and paying coupons on bonds.
Putin also instructed the Cabinet of Ministers and Ministry of Finance to identify banks for payments on Eurobonds under the new scheme within 10 days and make the necessary technical arrangements.
According to the document, which was published on the Kremlin website, Russia’s Eurobonds obligations will be recognized as fulfilled upon payment in rubles in an amount equivalent to the foreign currency value, and will be calculated at the current foreign exchange rate.
The US has prevented Russia from making debt payments in foreign currency. Last month, Washington ended a bond payments waiver, intending to stop Russia from serving its sovereign debt so it would default. Moscow has accused Washington of trying to engineer an artificial default, since the country has the funds to pay its debts.
Afterwards, the Russian Finance Ministry said Moscow would pay its Eurobond obligations in its national currency, the ruble, if it were unable to pay in foreign currency, in order to defend its reputation as a reliable borrower.
Finance Minister Anton Siluanov then said Russia was working on a new mechanism to service its debt coupons without the US waiver. The next Eurobond coupons maturing in 2027, 2028, and 2048 are due to be paid in late June.
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