Tue 05 April 2022:
The United States has stopped the Russian government from paying holders of its sovereign debt more than $600m from reserves held at American banks, in a move meant to ratchet up pressure on Moscow and eat into its holdings of US dollars.
Under sanctions put in place after Russia invaded Ukraine on February 24, foreign currency reserves held by the Russian central bank at US financial institutions were frozen.
But the US Department of Treasury had been allowing the Russian government to use those funds to make coupon payments on dollar-denominated sovereign debt on a case-by-case basis.
On Monday, as the largest of the payments came due, including a $552.4m principal payment on a maturing bond, the US government decided to cut off Moscow’s access to the frozen funds, according to a US Treasury spokesperson.
An $84m coupon payment was also due on Monday on a 2042 sovereign dollar bond.
The move was meant to force Moscow to make the difficult decision of whether it would use dollars that it has access to for payments on its debt or for other purposes, including supporting its war effort, the spokesperson said.
Russia faces a historic default if it chooses to not do so.
“Russia must choose between draining remaining valuable dollar reserves or new revenue coming in, or default,” the spokesperson said.
NEWS AGENCIES
___________________________________________________________________________________________________________________________________________
FOLLOW INDEPENDENT PRESS:
TWITTER (CLICK HERE)
https://twitter.com/IpIndependent
FACEBOOK (CLICK HERE)
https://web.facebook.com/ipindependent
Think your friends would be interested? Share this story!
