Russian officials claim the country can pay off foreign currency debt but will do so using the yuan.
The decision to use the Chinese currency arose after Western sanctions blocked Moscow’s ability to make bank transactions, crashing its economy.
“Claims that Russia cannot fulfill its sovereign debt obligations are untrue,” said Russian Finance Minister Anton Siluanov in a statement. “We have the necessary funds to service our obligations.”
RUSSIA SEEKS OUT MILITARY SUPPORT FROM CHINA IN UKRAINE CRISIS
The Finance Ministry said it approved a temporary measure allowing banks to make payments in yuan to pay off $117 million on two dollar-denominated bonds due on Wednesday.
If the sanctions hinder the ability of banks to pay their debts with foreign currency, the Finance Ministry will attempt to do so with rubles, whose value has diminished significantly since the start of the war. Siluanov framed the decision as an attempt by Western countries to “organize an artificial default.”
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Russia’s economy has struggled since the war began. Russia is facing several sanctions from members of NATO and the European Union and continues to battle with the economic blowback from the war. That struggle has only gotten worse as the United States announced its ban on Russian oil imports.
