Russia will pay its debts to non-friendly countries in rubles

According to a decree signed by Russian President Vladimir Putin on Saturday, Russian companies will be allowed to pay foreign creditors in rubles in order to avoid defaults amid continued capital controls in the country.

The decree introduced temporary rules for nation-state and corporate debtors to make payments to creditors. In the statement made by the government, it was stated that it will prepare a list of countries that are engaged in hostile activities against Russia and Russian companies and citizens within two days.

Russian corporate bonds denominated in foreign currencies have slumped in recent days due to the sanctions imposed on Russia. In response to the sanctions, the Russian government has significantly reduced access to foreign currencies, which could restrict bondholders from receiving interest and principal payments.