U.S. stops Russian bond payments, raising risk of default

Reuters ^ | 4/5/2022 | Megan Davies

[marcusmaximus]

The United States stopped the Russian government on Monday from paying holders of its sovereign debt more than $600 million from reserves held at U.S. banks, in a move meant to ratchet up pressure on Moscow and eat into its holdings of dollars.

Under sanctions put in place after Russia invaded Ukraine on Feb. 24, foreign currency reserves held by the Russian central bank at U.S. financial institutions were frozen.

But the Treasury Department 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 $552.4 million principal payment on a maturing bond, the U.S. government decided to cut off Moscow's access to the frozen funds, according to a U.S. Treasury spokesperson.

An $84 million 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.

JPMorgan Chase & Co (JPM.N), which had been processing payments as a correspondent bank so far, was stopped by the Treasury, a source familiar with the matter said.

[Alberta's Child]

Go back and read through my posts on this thread. I’m not complaining about “sanctions” against Russia because I have any interest in defending Russia. I’m simply pointing out that the outright theft of assets from another sovereign nation undermines US at least as much as it harms THEM in the long run. And this is particularly baffling when it is being done over something involving two other countries that shouldn’t even be a matter of compelling interest to the U.S. at all (unlike the situation in 1979-1980, for example, when the U.S. froze Iran’s assets after the U.S. embassy in Tehran was seized and American citizens taken hostage by a hostile government).

You can watch your rising interest rates as people lose faith in the U.S. dollar as a reserve currency to see my point.

[David Chase]

“ A great many of us are convinced that what we are doing is the most
important work of our lives.”
—————————————————————————————————————————

😆🤣😂 yeah, super duper important hard work.

Savin’ the World ain’t for the weak of heart, or a slow internet connection and poor typing skills.

Good grief………