The United States begins a ban on debt repayment in dollars by Russia – Observer

The Russian federal government will no longer be able to repay the debt in dollars, as it has been doing despite the sanctions, using US banks. The decision was made by the US Treasury and Makes Russia closer to hypothetical, i.e. a debt default that Moscow said would be “artificial” and “caused”, if verified. Payment will already be blocked.

“from today The US Treasury will not allow any dollar debt paymentsA spokesperson for the organization said, citing accounts linked to the Russian government in US financial institutions financial times.

With this decision, the spokesperson said Monday night, “Russia will have to choose between depleting its remaining dollar reserves, as well as the new revenue it still receives, or going to hypothetical“.

This is due to the freezing of all Russian financial reserves in US banks since the sanctions implemented at the end of February. However, despite this freeze, Russia was able to make debt-interest payments, in dollars, because these payments were approved, on a case-by-case basis, by the US Treasury.

These licenses, which were granted to Russia, came in the context of an exception system established by sanctions in place at the end of February that allows Russia to move these dollars if the goal is to pay interest and dividends.

According to the agency ReutersAlready on Monday, the US authorities prevented the Russian government from making a payment using these dollar reserves in US banks.

At stake is a repayment of a whopping $552 million that must be returned to investors – that is, it was not a periodic interest payment, but a repayment of the total principal in bonds.

But the Russian government was prevented from making this payment, which was to be made through JP Morgan Chase, which should start the 30-day “grace period” that is provided on most debt securities issued by the Russian government. Only then, if payment is not made, can default be declared.