Status: 05.04.2022 11:12 a.m
The US Treasury Department has prevented interest and principal payments on two Russian government bonds via American banks. The move is apparently aimed at foreign exchange reserves held directly by Moscow.
The US Treasury Department no longer wants to allow interest and principal payments from Russian government accounts with American banks. According to sources in the financial community, the Ministry of Finance has not given correspondent bank JPMorgan permission to process the latest payments on Russian government bonds.
Affected were the repayment of a $552.3 million bond maturing and an interest payment on a $84 million bond maturing in 2042.
Balance frozen
According to the US Treasury Department, the goal is that Moscow must now decide whether to use foreign exchange reserves under its direct control for the payments. These funds would then no longer be available for other purposes, including financing the war.
After the Russian invasion of Ukraine, Russian deposits in US banks had already been frozen. However, the Treasury Department has so far approved the use of these funds to pay interest on dollar-denominated bonds on a case-by-case basis.
Yesterday, several Western countries announced further sanctions in response to alleged Russian war crimes in Ukraine.
Is Russia still willing to pay?
As such, it is in the interests of the US government for western creditors to receive payments from Russia. So far, despite the sanctions, Russia has managed to avoid defaulting on its international debt. But it is unclear whether the Kremlin will continue to pay under the new conditions.
Russia now has a 30-day grace period to make the payments. If he misses this deadline or pays in rubles, although dollars, euros or another currency is indicated, this is considered a default.
International creditors currently hold a total of 15 Russian Federation bonds with a face value of around $40 billion. The country was prevented from issuing further bonds on Western financial markets as part of the sanctions until further notice.