MOSCOW: Russia will take legal action if the West tries to force it to default on its sovereign debt, Finance Minister Anton Siluanov told the pro-Kremlin Izvestia newspaper on Monday, sharpening Moscow’s tone in its financial wrestle with the West.

Meanwhile, the Russian central bank said on Monday it had temporarily suspended publishing data on foreign trade on a monthly basis in the first such suspension since 1997.

S&P on Saturday lowered Russia’s foreign currency ratings to “selective default” on increased risks that Moscow will not be able and willing to honor its commitments to foreign debtholders.

“Of course we will sue, because we have taken all the necessary steps to ensure that investors receive their payments,” Siluanov told the newspaper in an interview.

“We will present in court our bills confirming our efforts to pay both in foreign currency and in roubles. It will not be an easy process. We will have to very actively prove our case, despite all the difficulties.”

Siluanov did not elaborate on Russia’s legal options.

Russia faces its first sovereign external default in more than a century after it made arrangements to make an international bond repayment in roubles earlier this week, even though the payment was due in US dollars. read more Last week, Siluanov said Russia will do everything possible to make sure its creditors are paid.

“Russia tried in good faith to pay off external creditors,” Siluanov said on Monday. “Nevertheless, the deliberate policy of Western countries is to artificially create a man-made default by all means.”

Siluanov said Russia’s external liabilities amount to about 20 per cent of the total public debt, which stood at about 21 trillion roubles ($261.7bn). Of that, about 4.5-4.7tr roubles were external liabilities.

Russia has not defaulted on its external debt since the aftermath of its 1917 revolution, but its bonds have now emerged as a flashpoint in its economic tussle with Western countries.

A default was unimaginable until recently, with Russia rated as investment grade in the run up to its February 24 invasion of Ukraine, which Moscow calls a “special military operation” and which on Sunday intensified in eastern Ukraine.

“If an economic and financial war is waged against our country, we are forced to react, while still fulfilling all our obligations,” Silua­nov said. “If we are not allowed to do it in foreign currency, we do it in roubles.”

Central bank suspends monthly foreign trade data The central bank was due to release a foreign trade balance for January-February on Monday, as initially planned, according to its data release schedule.

The central bank did not explain its decision to suspend publication of the foreign trade data, monthly figures for which can be tracked back as far as 1997 on the bank’s website.

Published in Dawn, April 12th, 2022