In a statement credit ratings agency Fitch said, if Russia were to repay the two U.S. dollar bond coupon maturing on Wednesday in roubles, it would amount to a sovereign default once the grace period expires.

Western sanctions on Russia have limited Moscow’s ability to access and allocate cash.

“The payment in local currency of Russia’s U.S. dollar Eurobond coupons due on 16 March would, if it were to occur, constitute a sovereign default, on expiry of the 30-day grace period,” said Fitch in a statement.

Russia is scheduled to make two hard currency coupon payments of around $117 million sometime today.

In the event Russia pays back in roubles, the rating on both bonds would be lowered to ‘D’ after the grace period expires, while Russia’s long-term foreign currency rating would be set at ‘Restricted Default.’

“We understand that Russia’s Ministry of Finance made these coupon payments on the 2024 OFZs to the National Settlement Depository, but they were not paid on to foreign investors because of Central Bank of Russia restrictions,” said Fitch. “This will constitute a default if not cured within 30 days of the payments falling due.”

Fitch went on to add, it is applying a 30-day grace period in local bonds, known as OFZs, even if those are not detailed in the bonds’ documents.

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