Russia may be cut off from the world's lender of last resort as bonds head toward default

• G7 nations want to cut off Russia's access to emergency funding from organizations like the IMF and the World Bank.
• Moscow is expected to default on debt after sanctions blocked Russia from accessing foreign currency and gold reserves.

As Russia sits on the brink of default, the world's top economies have vowed to prevent it from tapping emergency funding that was used in a prior debt crisis.

On Friday, G7 nations pledged to cut off Moscow's access to lenders like the International Monetary Fund and the World Bank as Russia ramps up its assault on Ukraine.

"Russia cannot grossly violate international law and expect to benefit from being part of the international economic order," according to a statement from the US, Canada, Britain, Germany, France, Italy, and Japan, who also pledged to curtail its international trade with the West.

Sources of emergency funding were key during a previous Russian currency and debt crisis. The government received a $22.5 billion bailout from the IMF and other lenders in 1998 as it defaulted on sovereign debt.

Now, the effort to block IMF and World Bank funding comes as Russia suffers another debt crisis after sanctions froze Moscow's foreign currency and gold reserves.

Russia must make a $117 million debt payment Wednesday on two dollar-denominated bonds. But the finance ministry has said its sovereign bond payments depend on Western sanctions, and if it does pay — it'll do so in rubles.

This raises the technical possibility of a debt default, a likelihood that seems more certain after Fitch last week downgraded Russia's credit rating and said a sovereign default is "imminent."

Moody's and S&P Global too have cut their rating outlook for Russia, meaning that all three top rating agencies see the country's credit as junk.