MOSCOW, May 30 — Russia plans to settle its Eurobond obligations using a mechanism similar to the scheme used to pay for Russian gas in roubles, the Vedomosti newspaper reported, citing Finance Minister Anton Siluanov.

The United States pushed Russia closer to the brink of a historic debt default last Wednesday by not extending its licence to pay bondholders, as Washington ramps up pressure following Russia’s military intervention in Ukraine.

Facing an unprecedented debt crisis, Finance Minister Siluanov said on Friday that Moscow would continue to service its external debt in roubles, defending its role as a reliable borrower by all possible means.

In order to receive payments, Eurobond holders will have to open foreign currency and rouble accounts at a Russian bank, Siluanov told Vedomosti.

“As it happens with paying for gas in roubles: we are credited with foreign currency, here it is exchanged for roubles on behalf of (the gas buyer), and this is how the payment takes place. The Eurobond settlement mechanism will operate in the same way, only in the other direction,” Vedomosti cited Siluanov as saying.

Russia will be able to bypass Western payment infrastructure using this system, with payments being made through Russia’s National Settlement Depository (NSD), Siluanov told Vedomosti.

There will be no limit on rouble conversion into forex and the scheme will be reviewed by the government soon, he added. The finance ministry did not immediately reply to a Reuters request for comment.

This month, before the US waiver allowing Russia to continue servicing its debt expired, the NSD made coupon payments in foreign currency on Eurobonds maturing in 2026 and 2036. Both payments were due on May 27, with a 30-day grace period.

By many definitions, Russia will be in default if the funds do not appear in creditors’ accounts by the end of that grace period. Russia’s next Eurobond coupon payments fall due in late June.

Russian President Vladimir Putin has demanded that countries he terms “unfriendly” pay for gas in roubles or be cut off. Buyers are obliged to deposit euros or dollars into an account at a Russian bank, which then converts the cash into roubles. — Reuters