The US prevents Russia from paying its debt with dollars deposited in its financial system

Since Monday, the United States has prevented Moscow from paying its debts with funds deposited in the US financial system, as a way of increasing its pressure for the invasion of Ukraine, reported Tuesday the Treasury Department.

“Russia must choose between draining its remaining dollar-valued reserves, raising new revenues, or defaulting,” a Treasury spokesman told AFP.

Washington took this measure on Monday, “the deadline for Russia to make another payment on its debt,” he specified.

Russia has already faced several maturities since the end of February, when it launched the invasion of Ukraine.

On Monday he was due to finish paying off a $2 billion bond issued in 2012. It is the only Russian sovereign bond due this year and the amount to be repaid exceeds all other interest payments expected in 2022. If he does not pay in the period of 30 days of grace, will enter moratorium.

the american bank JPMorganwhich receives payments from the Russian central bank and transmits them to Citigroup to distribute them among creditors, “refused to deal with two other payments due on Monday after seeking advice from US authorities,” according to the Financial Times.

Contacted by AFP, neither of the two banks commented.

Debt payments had previously been exempt from Russia’s near-total blockade of the world financial system, and Moscow made many payments to foreign creditors through large US banks.

Russia was also allowed to receive payments for oil and gas sales even though the United States banned imports from that source.

But the White House warned on Tuesday that it would impose new sanctions on the Russian president Vladimir Putin following recent allegations of atrocities attributed to Russia in Ukraine.

The latest US decision “will further reduce Putin’s resources to pursue his war against Ukraine and create more uncertainty and challenges to his financial system,” the Treasury official said in a statement. He warned that Russia “is facing a recession, skyrocketing inflation (and) a lack of basic goods.”

These sanctions raise fears that Moscow will not be able to honor its payments and will therefore face a default.