(Reuters) President Joe Biden administration has moved to curtail the Russian government from paying holders of its sovereign debt from reserves held with the US banks.
The payment, more than $600 million, is an attempt by Washington to exert more pressure on Russia due to its invasion of Ukraine.
Banking giant JPMorgan, which was acting as Russia’s correspondent bank, has been stopped by the Treasury Department from processing the payments.
The US froze the foreign currency reserves held in its financial institutions by the Russian central banks after its invasion of Ukraine on February 24. The US was still allowing Russia to use the funds for coupon payments.
Russia now faces a historic default if it fails to use the dollars it has to make the payments on the debt, with some due payments having a 30-day grace period. If they choose to use the dollars at their disposal, their ability to finance the war would dwindle.
Russia has a total of 15 international bonds outstanding, carrying a face value of about $40 billion. Global sanctions have so far frozen about half of some $640 billion in gold and foreign currency reserves.
USDRUB is down -1.22%
