Russia makes last-minute bond payment to avoid default

Representative picture (Image: Reuters)

Russia staved off a default on its debt Friday by making a last-minute payment using its precious dollar reserves sitting outside the country, US Treasury officials said.

The amount of the payment was not disclosed, but earlier this month Russias finance ministry said it tried to make a $649 million payment due April 6 towards two bonds to an unnamed U.S. bank previously reported as JPMorgan Chase.

At that time, tightened sanctions imposed for Russia's invasion of Ukraine prevented the payment from being accepted, so Moscow attempted to make the debt payment in rubles.

Investors and rating agencies, however, did not expect Russia to be able to convert the rubles into dollars before a 30-day grace period expired next week, leading to speculation that Moscow was heading toward an historic default on its debt. Russia has not defaulted on its foreign debts since the Bolshevik Revolution in 1917, when the collapse of the Russian Empire led to the creation of the Soviet Union.