Fitch Ratings said that Russia would default on its two US dollar bond coupon payments due this Wednesday if it makes payments for those coupons in roubles.

"The payment in local currency of Russia's U.S. dollar Eurobond coupons due on 16 March would if it were to occur, constitute a sovereign default, on expiry of the 30-day grace period," Fitch said.

Russia is due to make two hard currency coupon payments of near $117 million on Wednesday, per Reuters.

Market reaction

USD/RUB keeps its rebound intact from weekly lows of 104.00, currently trading at 108.45, posting small gains on the day.

The pair staged a solid recovery and briefly recaptured 117.00 amid a risk-on market profile and optimism over a potential truce between Russia and Ukraine.

The renewed upside in the spot lacks follow-through, as the US dollar remains under heavy selling pressure amid the upbeat mood and ahead of the all-important Fed decision.