Posted on 04/05/2022 10:22:44 AM PDT by 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.
(Excerpt) Read more at reuters.com ...
The lying, murderous despot of Russia made his bed. Now he can lie in it.
By the way, change your handle name. You are NO patriot of anything, let alone truth, justice, and liberty.
Oh, the mask has come off alright. Off sicko Putinists.
Now we see you for the monstrosities you are.
What makes you think his successor will be any better?
Actually, that might be TOO disruptive … or at least too disruptive too quickly.
“If Russia Defaults will the USA officially confiscate Russian Assets to make the banks whole”
You mean like the $600 million in Russian reserves held by those banks that supposedly can’t be used by Russia to pay the bond debt?
I’m so confused….
Can’t wait for the next round of US bonds to hit the market to see who’s buying…
Watch the video. Learn why KGB Putin is losing his war.
Exactly, I never understood the concept of Credit Default Swaps, it would be like me buying fire insurance on my neighbor’s house and multiple other people doing the something, resulting in the house being insured for multiple times it’s worth.
I guess the assumption is no one defaults on their sovereign debts so why not sell the CDSs since no one defaults the payouts will never happen, until they do and all hell breaks loose.
The best case scenario is this action is an amazingly short sighted stupid move made by American politicians. You’d have to be an idiot not to see the ramifications of this action for years to come. Half the world will be hesitant to put a nickel in U.S. banks after this. More likely it is the work of the global cabal though.
It’s crazy, the USA has frozen assets that belong to Russia but are deposited in US Banks.
Russia defaults, what happens if the USA takes those frozen Russian Assets and pays the debts of Russia, avoiding a default and the triggering a debt crisis.
You have to ask yourself if you are foreign country with deposits in US Banks, how comfortable are you with the idea that at any time the USA could confiscate your assets...
Bingo
The Russian people are seeing a clear view of how the West views their entire nation and culture with extraordinary hostility. We have gone way beyond “ regime change” to restore relations, now that we are destroying any trust in our nation.
And PS Europe….some of you are seeing some light.
Germany…you’re next to be brought down if you don’t submit to US policy directives. We can replace you with Poland as our new BFF
Biden andthe Dems have already destroyed the world economy and any trust in the banking system and contracts…what more does he need for his fragile old man’s ego?
Perhaps a better example, Mel Brooks and ‘The Producers?’
They designed something that could not possibly succeed, until it did.
I appreciate reading all of these insights. I do not understand the emotions. I suppose it is because I do not have a dog in this Hunt.
No thanks. Twitter is an open sewer, but your fascination with it explains your obsession with this war.
Yup, holding money in a bank is not as safe as it used to be. That’s how read the trucker situation and this has been confirmation for me.
Biden has weaponized the USD, and even gold
How many BRICS and developing world trust our future benevolence toward their sovereignty, to keep their reserves under our control?
Exactly. The government does whatever it wants to do.
We used to be a functioning republic. Just saying.
“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.”
I’m thinking not too many countries will make the mistake of holding their foreign currency reserves in US banks anymore.
If you remove this Putin government, someone radical will rise who comes in the door _knowing_ that the west is a deadly enemy who brought financial devastation to them.
************
Thank you for keeping it real. This whole thing is spiraling out of control and opening the door to extreme actions on both sides. A very wicked stew of potentially very disastrous consequences is forming.
There was a window of opportunity for statesmanship and sanity to offer a way out of this mess. That’s gone now.
Actually U.S. Pres. Joe Biden and Ukrainian Pres. Zelenskyy decided to break a long standing agreement by agreeing Ukraine could join NATO. Ukraine would then be aligned with the West, not a neutral country. It is common knowledge that Ukraine armed with U.S. funded bio-labs , and part of NATO would be threatening to Russia. Joe Biden and Mr. Zelenskyy obviously wanted to start a war with Russia. Zelenskyy knowingly put his citizens at risk. Joe Biden, fresh from his Afghanistan disaster IMO wanted to hurt American citizens with his warmongering, and in the process destabilize our nation and Europe as well.
,
“in a move meant to ratchet up pressure on Moscow and eat into its holdings of dollars. “
exactly how does preventing moscow from spending dollar reserves to pay back bond principal eat into its holdings of dollars? ...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.