Russia appeared set to avert a debt default yesterday after claiming it had made two overdue dollar bond payments previously blocked by western sanctions, despite what the central bank governor described as “a zone of colossal uncertainty” in the economy.

In the latest twist to the saga over whether Russia will renege on its debts for the first time since 1998, the country’s finance ministry said the payments — totalling $649mn and originally due on April 4 — had been sent to Citigroup in dollars, the paying agent responsible for distributing cash to bondholders.

“The finance ministry has the resources, and from an economic point of view there can be no talk of any default,” said Elvira Nabiullina, head of the central bank. “But we are witnessing difficulties with payments.”

After US authorities earlier this month stopped American banks from processing the payments, Russia said it would instead use roubles, which is not permitted by the terms of the bonds.

Moscow then claimed it had fulfilled its obligations and threatened to take legal action if sanctions forced it into default.

Yesterday’s statement suggested a change of tack that could dodge default if investors get their dollars before a 30-day grace period that expires on May 4.

Citigroup declined to comment.

Russian bonds, which had traded at levels indicating investors assumed default was all but inevitable, rose sharply in price. Brokers offered to sell the April 2022 bond, which had been due for repayment this month, at prices as high as 80 cents on the dollar.

Longer-dated Russian dollar bonds traded at between 35 and 40 cents on the dollar, up between 10 and 15 cents on the day.

“It looks like there’s no default, for now,” said a bond investor.

A US official said the debt payments announced yesterday were made usin.