Russia appeared to be on the verge of avoiding a sovereign default after overdue payments on two of its sovereign Eurobonds were paid to some of its creditors, according to reports quoting sources with knowledge of the matter.

The finance ministry stated on Friday that it had paid roughly $650 million in coupons and principal to bond holders ahead of the grace period closing on May 4 in what appeared to be a late U-turn to prevent a default on the bonds.

A senior US official acknowledged that Moscow executed the payment without utilising frozen US deposits, but that the specific source of the monies was unknown.

On Monday, cash were released to some bondholders, according to reports citing unknown sources.

The $40 billion in international bonds issued by Russia has been the focus of a financial stalemate between Western capitals, who have imposed sweeping sanctions on the country as a result of its war in Ukraine, and Moscow, which has responded with counter-measures.

The restrictions have hampered debt payments on sovereign and corporate bonds, causing a number of corporations and state-owned enterprises, such as Russian Railways, to miss deadlines.

The April 4 payments are for a bond that matured on that date as well as interest payments on a bond due in 2024.

The focus is now on impending payments, with Russia set to pay coupons on a dollar-denominated bond issued in 2016 and a euro-denominated bond scheduled in 2021 on May 27.

After a temporary licence provided by the US Office of Foreign Assets Control (OFAC) enabling transactions relating to Russian sovereign debt payments expires on May 25, that payment is due. The US Treasury has yet to say whether or not the deadline will be extended.

(Adapted from AlJazeera.com)