The ruble is artificially inflated because Russia wants to be paid in rubles for oil and gas along with their interest rate at 20%.
They then turned around an made a debt payment in rubles putting them in default since the payment had to be dollars.
Russia pays dollar-denominated debt in rubles, risking default, after U.S. blocks payment. Credit rating agencies have indicated that payments in a currency different from the one the debt was sold in would count as a default once the grace period expired.
By Eshe Nelson and Lananh Nguyen April 6, 2022 Russia’s finance ministry said on Wednesday that it had used rubles to pay about $650 million in dollar-denominated debt obligations after the U.S. government blocked access to dollars held in American banks. The move pushed the country closer to a default.
Credit rating agencies have indicated that payments in a currency different from the one the debt was sold in would count as a default once the grace period expired. Russia’s debt payments that were due on Monday have a 30-day grace period and had no provision for repayment in any currency other than dollars. It would be Russia’s first default on foreign currency debt in more than a century. JPMorgan Chase was not given permission by the U.S. authorities to process Monday’s bond payment, according to a person familiar with the situation who spoke on condition of anonymity because of the sensitivity of the situation. It had previously been cleared to handle five other payments after sanctions were imposed last month, the person said.
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