Kiev has a 10-day grace period to pay debt to Moscow after the late December deadline.
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Ukraine turned down the offer, saying it can not offer Russian Federation a better deal than the one it negotiated with other debt holders.
However, the International Monetary Fund has recently changed its policy on such debts, leaving the door open for Ukraine to keep borrowing even if it falls behind with the repayments.
The moratorium will be in place “until the acceptance of our restructuring proposals or the adoption of the relevant court decision”, Mr Yatseniuk told his government.
Russian President Vladimir Putin promised to deliver new electricity supplies to power-short Crimea in a surprise visit to the disputed territory on December 2. “Effectively, there are only legal prospects now”.
The government in Kyiv has also sought to give a political dimension to the debt, hinting that Russian Federation bought Ukrainian bonds in December 2013 in a clandestine bribe of then-President Viktor Yanukovych, who was facing massive anti-government protests at the time.
He said Ukraine had no chance of winning the ensuing court case.
He also said Ukraine would cancel payments on $507m of Ukrainian commercial debt held by Russian banks.
Storchak said Ukraine had no chance of winning in court.
Earlier Friday, the European Commission announced another decision likely to cause further offence in Moscow, offering short-stay visa-free travel for Ukraine, Georgia and Kosovo, all embroiled in disputes with Russian Federation. “Without growth – credits are not returned”.
“The Ukrainian Government has indeed negotiated in good faith all along and in line with the IMF-supported Program’s debt operation targets, without prejudice to its position on the underlying debt obligations themselves”, the Ukrainian ministry of finance said, in a statement released Thursday.
The IMF this week agreed with Moscow that the bond consists of an official loan.
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The IMF has taken Russia’s side and recognized Ukraine’s debt as sovereign, meaning Kiev would have to declare default if unable to pay.
