Russia claims it has paid crucial interest on its two eurobonds in dollars, which appears to be able to avoid a major debt default.

Russia’s Finance Ministry announced Friday that $117 million had been paid to the London branch. U.S. Bank is charged with processing bondholder payments.

Following a series of economic sanctions it had not been clear if Russia could have met its debt obligations to the external world. its invasion of Ukraine.

American and other international allies imposed measures to block large amounts of Russia’s foreign and gold reserves. They also sought to isolate Moscow from the global financial market.

The Kremlin still had time to pay $117 Million in interest on the two sovereign eurobonds it had purchased. These payments might not have been made on time, which could have allowed Russia to take over. first foreign currency debt default in more than a century.

Two Russian-dollar bonds holders received their coupon payments on Thursday. This was a day late than anticipated, according to the Wall Street Journal reportedCiting traders and investors, the report stated that funds had been received within the 30 day grace period set forth in the bond terms.

Dmitry Peskov, spokesperson for the Kremlin, stated Thursday that any default would be “purely artificialRussia had sufficient funds to meet its obligations under external debt.

Russia may have managed to fulfill its coupon obligations on time, but Moscow will likely be subject to new challenges.

This is because a U.S. sanction exemption that was granted in May will expire, potentially further complicating Russia’s ability to pay foreign debts.

JPMorgan ChaseCentral Bank of Russia asked Citi in London, which is the largest U.S. bank, to pay $117 Million of the coupon payments it had for their sovereign bonds. Following consultation with U.S. Treasury Department officials, the payment was made to Citi, London’s paying agent.

CNBC reached out to the U.S. Treasury Department spokesperson but he was unavailable for comment when CNBC called him Friday morning.

JP Morgan Chase, Citi, and Citi declined to comment.

Citi was a Russian foreign bondholders’ paying agent and responsible for processing payment requests from security holders on behalf of issuers. It’s not common for financial and confidential information to be disclosed.

BlueBay Asset Management’s senior emerging market sovereign strategist Tim Ash described the U.S. Treasury Department’s Office of Foreign Assets Control’s payment as “ridiculous”.

The OFAC is responsible for enforcing economic sanctions that are based upon U.S. Foreign Policy Objectives.

Ash, via email, stated that OFAC was “bailing out Western bondsholders who should know better” and taking money from a potential Ukraine reparation funds.

According to the U.S. Treasury, sanctions against Russia have not prevented Russia from paying its international debts until at least May 25, according to previous statements.