US stops Russian bond payments in bid to raise pressure on Moscow

NEW YORK / WASHINGTON, – The United States on Monday barred the Russian government from paying more than 600 600 million to its sovereign debt holders in US bank reserves, a move aimed at increasing pressure on Moscow. And food has to be eaten. In its US dollar holdings.

Russia’s foreign exchange reserves with the central bank were frozen in US financial institutions under sanctions imposed following Russia’s February 24 attack on Ukraine.

But the Treasury Department was allowing the Russian government to use the funds to pay off coupons on a case-by-case basis on dollar-denominated sovereign loans.

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.