Russia warns it may be forced to pay foreign currency debt in roubles due to sanctions

Western sanctions over events in Ukraine have cut Russia off from key parts of global financial markets

Russia's finance ministry said on Monday it had approved a temporary procedure for repaying foreign currency debt, but warned that payments would be made in roubles if sanctions prevent banks from honouring debts in the currency of issue.

Qazet.az reports that Western sanctions over events in Ukraine have cut Russia off from key parts of global financial markets, triggering its worst economic crisis since the 1991 fall of the Soviet Union.

"Claims that Russia cannot fulfil its sovereign debt obligations are untrue," Finance Minister Anton Siluanov said in a statement. "We have the necessary funds to service our obligations."

The government is due to pay $117 million on two of its dollar-denominated bonds on Wednesday.

The ministry said it had approved a temporary procedure to allow banks to make payments in foreign currency, but said the possibility of those payments going through would depend on sanctions.