Russia beats final deadline to avoid debt default

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Russia was able to avoid default on its debts by making payments in US dollars before the deadline.

The payments on international bonds were due on April 4.

Russia was unable to make payments from reserves frozen by the US because of sanctions.

Russia changed its policy last week after it offered to pay in roubles.

The US Treasury and Russia have been at odds over how Russia is allowed to service its debts.

If Russia only made the payments in roubles, it would have been a default if it hadn't paid on time.

On April 29, it announced that it would change course and pay from the portion of its dollar reserves that were not kept in the West.

The payments have been made.

The US official said that Russia was forced to choose between draining their remaining valuable dollar reserves or new revenue coming in.

Russia has made their debt payment using funds located outside the US. The official said that these valuable reserves have left Russia and can be used to fund the invasion of Ukraine.

According to sources quoted by the news agency, the payments have arrived in some investors accounts.

A default might not have been permanently averted. Russia has around $40 billion of international bonds still outstanding, and may have trouble making debt payments after 25 May, when US Treasury provisions allowing debt interest and repayments expire.

Russia had not paid its government debt since the economic crisis of 1998 when President Yeltsin was in office.

Russia is prepared to spend its foreign currency reserves to avoid a government default.

The credit reference agencies are not allowed to cover Russian debts because of EU sanctions.