The United States prevented the Russian government last Monday (4) from paying holders of its sovereign debt more than US$ 600 million in reserves held in US banks.
The move is aimed at increasing pressure on Moscow and eroding its dollar holdings.
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 Treasury Department was allowing the Russian government to use these funds to make coupon payments on its dollar-denominated sovereign debt on a case-by-case basis.
On Monday, as the largest of the payments, including $552.4 million due on a bond, was due, the U.S. government decided to cut off Moscow’s access to frozen funds, according to a U.S. Treasury spokesperson. .
An $84 million coupon payment was also due on Monday, referring to a 2042 dollar-denominated sovereign bond.
The move is intended to force Moscow to make the difficult decision between using the dollars it has access to for debt payments or for other purposes, including supporting its war effort, the spokesman said.
“Russia must choose between draining the remaining valuable dollar reserves and incoming new revenues or defaulting,” the spokesperson said.
Source: CNN Brasil
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