Pro-US Ukraine govt blinks, will make Russian debt payment

Ukraine's finance minister said on Friday that Kiev would make the next interest payment on a disputed Russian loan it had threatened to stop servicing. "Two days ago, we paid USD 39 million (34 million euros) for (Western-held) Eurobonds, and we will also pay USD 75 million to cover the so-called Russian bonds," Natalie <g data-gr-id="18">Jaresko</g> told reporters.

Russia had warned it would ask the International Court of Justice in The Hague to declare Ukraine in default if it failed to make a scheduled USD 75-million interest payment on Saturday. <g data-gr-id="15">Jaresko</g> said the money would be delivered on Monday because Saturday was a bank holiday.

The coupon covers a USD 3 billion loan Moscow extended to former Ukrainian president Viktor Yanukovych in the wake of his shock December 2013 decision to ditch a landmark EU alliance and preserve closer ties with Russia. The pro-Western leadership that emerged after three months of protests over that decision has denounced the loan as little more than a Kremlin bribe and recently tried to delay its repayment.

But Moscow -- already accused by Kiev and the West of orchestrating and supporting the pro-Russian uprising in Ukraine's separatist east -- has refused to negotiate and still expects the bond's principal returned when it matures in December.