Russia will not sell bonds to foreign or domestic investors this year, Finance Minister Anton Siluanov has said.
The government is on the brink of a technical default on its debts, after the US Treasury blocked dollar payments.
Siluanov said interest rates would likely now be "cosmic" if Russia tried to borrow via the bond market.
Russia will not sell bonds this year because interest rates would be "cosmic", Finance Minister Anton Siluanov has said.
The Russian government is on the brink of defaulting on its foreign currency bonds for the first time since 1918, after the US Treasury blocked Moscow from making dollar debt payments using reserves at American banks.
However, Siluanov told the Russian newspaper Izvestia, in an interview published Monday, that the government has tried to pay in good faith but that Western governments are trying to "artificially create a man-made default by any means."
Siluanov said investors would likely demand a very high rate of interest from the government in the future due to the difficulties surrounding its sovereign debts.
He said Russia would not sell bonds either abroad or at home this year, although he said the government may borrow from domestic investors at some point in the future.
"We do not plan to enter the domestic market or foreign markets this year," he told Izvestia. "It makes no sense, because the cost of such borrowing would be cosmic.
"If we talk about entering foreign markets in the future, let's see how the situation will develop. I think that in the near future it is hardly possible. If we do borrow, it will be primarily from domestic investors."
Yields on Russian two-year bonds, which are highly illiquid, are around 11%, compared with about 5.8% a year ago.
Investors demand higher interest rates from governments or companies they think are at greater risk of default, to compensate for the chance of non-payment. They are also highly influenced by the major ratings agencies, which have all sharply downgraded Russia's credit rating.
S&P Global Ratings, one of the biggest agencies, on Friday said Russia was in default after $650 million of payments on dollar bonds due on Monday, April 4, failed to reach investors.
Russia had attempted to pay, but the move was blocked by the US Treasury. Instead, Russia sent rubles to special accounts at the country's National Settlement Depository.
S&P said sanctions made it unlikely that investors would receive their payments in dollars, even after a 30-day grace period.
Siluanov also told Izvestia Russia would sue to defend its claim that it has tried to pay its debts but is being pushed into a technical default.
A leading sovereign debt expert told Insider this weekend a Russian default would likely unleash years of complex litigation, describing the situation as a "giant mess."
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