Russia could be in default after trying to service its dollar bonds in rubles, Moody's said.

Russia made the payment on two sovereign bonds maturing in 2022 and 2042, due on April 4, in rubles, rather than in dollars, which it was required to pay under the terms of the securities. Thus, Russia can be considered to be in default as determined by Moody's if it does not correct the situation by May 4, which is the end of the grace period, Moody's said in a statement, Reuters reports.

Bond contracts do not provide for redemption in any other currency than dollars.

Moody's said that while some Russian Eurobonds issued after 2018 allow ruble payments under certain conditions, those issued before 2018, such as maturing in 2022 and 2042, do not.

Moody's believes that investors did not receive the foreign currency contractual promise by the due date for payment.

In 1998, Russia defaulted on $40 billion of domestic debt and devalued the ruble under President Boris Yeltsin because it was effectively bankrupt after the Asian debt crisis, and falling oil prices undermined confidence in its short-term ruble debt.

This time, Russia has the money but can't pay because the world's fourth-largest reserves are frozen by the United States, the European Union, Britain and Canada.

This could be the first major default in Russia in over a century. Even when the Soviet Union collapsed, Russia took on foreign debt.