A major credit rating agency warned on Friday that Russia is on the verge of defaulting on its financial commitments, the latest indication that rising Western sanctions over the Ukraine crisis might have long-term consequences for the Russian economy.

According to Moody’s, Russia breached the conditions of two bond contracts with payments due on April 4 by paying in rubles rather than dollars. The dollar-denominated bonds will maturity in 2022 and 2042, respectively.

Moody’s stated that the usage of rubles “represents a change in payment conditions relative to the original bond contracts and hence may be regarded a default under Moody’s definition if not remedied by the end of the grace period on 4 May.”

On Friday, a major credit rating agency warned that Russia is on the verge of defaulting on its financial obligations, the latest evidence that escalating Western sanctions over the Ukraine conflict may have long-term ramifications for the Russian economy.

Russia violated the terms of two bond contracts with payments due on April 4 by paying in rubles rather than dollars, according to Moody’s. The dollar bonds will mature in 2022 and 2042, respectively.

According to Moody’s, the use of rubles “represents a change in payment terms related to the original bond contracts and hence may be considered a default under Moody’s definition if not corrected before the end of the grace period on 4 May.”

Experts earlier informed The Washington Post that Russia was likely to fail on a $2.2 billion debt due on April 4 – a sum that had to be paid in dollars.

Since Russian President Vladimir Putin authorised the invasion of Ukraine in late February, the United States and its Western allies have virtually cut Russia off from the world economy through a variety of sanctions.

Russian banks were kicked out of the SWIFT international payments system, and sanctions were imposed on a variety of financial institutions and enterprises.

In March, Russian officials warned that the West had frozen around $300 billion of the country’s $640 billion in gold and foreign currency reserves.

Russian Finance Minister Anton Siluanov warned the Kremlin-friendly Izvestia tabloid that if the country defaulted, Moscow would take legal action. Meanwhile, Putin has mandated that European countries pay for Russian oil and gas in rubles, a move largely perceived as an attempt to support the currency.